IRS Clarifies HDHP Coverage Of COVID-19 Testing, Treatment Before Deductible

The IRS recently issued Notice 2023-37 (Notice) relating to pre-deductible coverage of COVID-19 testing and treatment under high-deductible health plans (HDHPs). Specifically, the Notice establishes a 2024 expiration date for previous IRS relief that allowed participants to contribute to health savings accounts (HSAs) even if the accompanying HDHP provided coverage for COVID-19 testing and treatment before meeting the deductible. The Notice also clarifies that testing for COVID-19 will generally not meet the HSA preventive care safe harbor for pre-deductible coverage of preventive care benefits.

Expiration of COVID-19 Relief for HDHPs

Under the Internal Revenue Code's HSA provisions, a participant must be covered under an HDHP and have no "disqualifying" health coverage (generally, coverage that pays benefits before the minimum deductible has been met).