COVID-19 Impacts to High Deductible Health Plans
It goes without saying that COVID-19 has changed life as we know it and, with those changes, comes a need to adapt. In response to the crisis, many private and government entities are making changes to help Americans face this pandemic and its fallout head-on. High Deductible Health Plans (HDHP) are no different. Here are two recent impacts that plan sponsors should consider when addressing the needs of their HDHP members.
New Guidance from the IRS
Plan sponsors typically offer HDHPs with higher deductibles in order to deliver lower premiums to their members. These plans are governed by the IRS, which means that the IRS sets annual limits for minimum deductibles and maximum out of pockets. Additionally, they mandate that a member’s deductible must be met before any type of coverage can apply – with a few regulated exceptions like preventive care.
In response to potential COVID-related health care needs and the financial burden that they might bring, the IRS released Notice 2020-15. This notice is in effect until further guidance is provided, and allows HDHPs to cover all COVID-19 testing and treatment, prior to the deductible being met. It also allows eligible members to still contribute to their Health Savings Accounts (HSA) or use HSA funds for these types of expenses, which prior to the notice wouldn’t have been possible. If a plan sponsor chooses to adopt this guidance, it’s one more way to assist members in navigating these difficult times. This type of aid can be especially helpful for members that are facing financial struggles as a result of the virus.
The CARES Act
The Coronavirus Aid, Response and Economic Security (CARES) Act was signed into law at the end of March and brought a number of changes to the usability of HDHPs. Specifically, retroactively effective January 1, 2020, it permanently allows HDHP members to use their HSA, health reimbursement account (HRA) and flexible spending account (FSA) funds to pay for over-the-counter medications and other items, including, but not limited to, menstrual care products, thermometers, batteries for medical devices and cold and allergy medications. This change helps members get the essential health care products they need during the pandemic. Lastly, in an effort to control the spread of the virus, the CARES Act also allows plan sponsors to cover telemedicine visits without any cost-sharing for members prior to meeting their deductible through 2021.
In addition to these governmental changes that offer relief for Americans, plan sponsors can take advantage of several Express Scripts solutions to address the impact of COVID-19, both financial and emotional, to their members.
The wellbeing of our community is of utmost importance to Express Scripts during these extraordinary times, and these solutions are just some of the many innovative partnerships that we’ve leveraged to help our community as it navigates through these challenging times. While it’s not a return to normal, it’s at least peace of mind until we get there.