HDHP Preventive Care Expanded to More Contraceptives
Published November 11, 2024
Question: What are the new preventive expenses that HDHPs can provide with first-dollar coverage without affecting participants’ HSA eligibility?
Short Answer: New IRS guidance expands the permitted preventive care offerings to include over-the-counter oral contraceptives (including the birth control “minipill” and the emergency contraception “morning after pill”) and male condoms. The guidance also clarifies the scope of preventive care for breast cancer screening, continuous glucose monitors, and selected insulin products.
General Rule: HDHP Must Impose Minimum Statutory Deductible
The general rule is that an individual must meet two primary requirements to be HSA-eligible (i.e., eligible to make or receive HSA contributions):
Be covered by §223 HSA-compatible high deductible health plan (HDHP); and
Have no disqualifying coverage (generally any medical coverage that pays pre-deductible).
HSA eligibility also requires that the individual cannot be claimed as a tax dependent by someone else.
One of the key requirements for all HSA-compatible HDHP coverage is that the plan must impose at least the statutory minimum deductible prior to paying for covered services. In 2025, the minimum statutory HDHP deductible is $1,650 for single coverage, and $3,300 for family coverage.
For more details:
HDHP Preventive Services: First-Dollar Coverage Permitted
The main exception to the HDHP minimum deductible requirement is the ability of an HDHP to provide first-dollar coverage (or coverage not otherwise subject to the deductible) for preventive care without affecting HSA eligibility.
“Preventive care” for HDHP purposes generally includes:
Periodic health evaluations, including annual physicals,
Routine prenatal and well-child care
Child and adult immunizations
Tobacco cessation programs
Obesity weight-loss programs
Screening services (see IRS Notice 2004-23 for more details)
The ACA preventive services that are required to be provided without cost-sharing for non-grandfathered health plans (see The ACA Preventive Health Services Mandate for more details)
Medical services and items to prevent exacerbation of a chronic condition (see IRS Expansion of Preventive Care to Include Chronic Conditions for more details)
NEW: Additional Types of Contraception (IRS Notice 2024-75)
The Additional Types of Preventive Care that Now Qualify as Preventive Care
In the recently released IRS Notice 2024-75, the IRS added two types of contraception to the list of preventive care that HDHPs can cover before satisfaction of the deductible:
Over-the-Counter Oral Contraceptives
The guidance expands preventive care for HSA eligibility purposes to include over-the-counter (OTC) oral contraceptives such as the progestin-only birth control commonly referred to as the “minipill,” and emergency contraception such as levonorgestrel, which is commonly referred to as the “morning after pill” or “Plan B One-Step”. These expenses no longer require a prescription to qualify.
The result is that preventive care has been expanded to include all benefits for OTC oral contraceptives for any HDHP covered individual potentially capable of becoming pregnant. This now includes, but is not limited to, OTC birth control pills and emergency contraception, regardless of whether they are purchased with a prescription. HDHPs may cover these expenses before such an individual satisfies the minimum statutory HDHP deductible without affecting their HSA eligibility.
The IRS made these expansions effective retroactively to plan years beginning on or after December 30, 2022.Male Condoms
The guidance expands preventive care for HSA eligibility purposes to include male condoms. Previously, only female condoms were included.
The result is that preventive care has been expanded to include all benefits for male condoms, regardless of whether they are purchased with a prescription and regardless of the gender of the individual covered under the HDHP who purchases them. HDHPs may cover male condom expenses before an individual satisfies the minimum statutory HDHP deductible without affecting their HSA eligibility.
The IRS made this expansion retroactively effective for plan years beginning on or after December 30, 2022.
Note: This guidance is in tandem with additional IRS guidance confirming the treatment of condoms as a §213(d) medical expense eligible for FSA/HRA/HSA reimbursement if not covered by the health plan.
Clarifications of Previous Guidance for Other Preventive Services
In IRS Notice 2024-75, the IRS also added new clarifications on the scope of three existing types of preventive services that HDHPs can cover before the individual satisfies the deductible:
Breast Cancer Screening
The guidance clarifies that mammograms are not the only type of preventive care related to breast cancer screening. The clarification is retroactively effective as of April 12, 2004 (when mammograms first qualified as preventive).
HDHPs may therefore also cover imaging other than mammograms (including MRIs, ultrasounds, and other similar breast cancer screening services), and all other types of breast cancer screening for individuals who have not been diagnosed with breast cancer, before an individual satisfies the minimum statutory HDHP deductible without affecting their HSA eligibility.Continuous Glucose Monitors
The guidance clarifies that glucometers are not the only type of preventive care related to measuring glucose levels. The clarification is retroactively effective as of July 17, 2019 (when glucometers first qualified as preventive).
HDHPs may therefore also cover glucose monitors other than glucometers (including continuous glucose monitors) for individuals diagnosed with diabetes before such individual satisfies the minimum statutory HDHP deductible without affecting their HSA eligibility.
The IRS notes that if a continuous glucose monitor provides additional medical or non-medical functions that are not preventive care (other than minor functions, such as clock and date functions) they will not qualify as preventive care, and therefore the standard HDHP minimum statutory deductible must apply.Selected Insulin Products
The guidance clarifies that selected insulin products can be covered without regard to whether the insulin product is prescribed to treat an individual diagnosed with diabetes or prescribed for the purpose of preventing the exacerbation of diabetes or the development of a secondary condition. It also clarifies that any devices used to administer or deliver these selected insulin products qualify as preventive. The clarification is retroactively effective for plan years beginning after December 31, 2022 (when selected insulin products first qualified as preventive regardless of whether the individual has diabetes).
HDHPs may therefore cover any dosage form (such as vial, pump, or inhaler dosage forms) or any different type (such as rapid-acting, short-acting, intermediate-acting, long-acting, ultra long-acting, and premixed) of insulin, and any devices used to administer or deliver these selected insulin products, before an individual satisfies the minimum statutory HDHP deductible without affecting their HSA eligibility.
Employer Coordination with HDHP Carrier/TPA
Certain expenses addressed in this new guidance are subject to the ACA preventive health services mandate that requires non-grandfathered health plans to cover the expense without cost-sharing (i.e., at no cost to the participant). In general, however, OTC items and services are not subject to that mandate unless prescribed by a health care provider. Other expenses are not subject to a coverage mandate regardless of prescription, but instead are merely optional HDHP preventive services. Furthermore, plans may impose the deductible on any expense not subject to the ACA preventive health services mandate.
The result is that not all HDHPs will cover the expenses addressed in this new IRS guidance, and not all these expenses that are covered will be available prior to satisfaction of the HDHP deductible. Employers with fully insured plans will rely on the insurance carrier for these determinations. Employers with a self-insured plan should generally work with their TPA and stop-loss provider to coordinate which of these newly available/clarified preventive services the plan will provide with first-dollar coverage (or coverage not otherwise subject to the deductible), and update the plan materials accordingly.
Note: The Departments recently proposed regulations to change the ACA preventive health services mandate as of 2026 to require coverage of certain OTC contraceptive items without cost-sharing regardless of prescription.
Reminder: First-Dollar Telehealth Coverage Expiration for Plan Years Beginning On or After January 1, 2025
The CARES Act, CAA 2022, and CAA 2023 all provided relief from the minimum deductible requirement for telehealth and other remote care services—regardless of whether such services were preventive—in light of the pandemic. Those legislative packages have allowed individuals to maintain HSA eligibility even where their HDHPs waives the deductible for any telehealth or other remote care.
For more details: CAA 2023 Includes Two-Year HSA Telehealth Relief Extension Through 2024
This telehealth relief only extends to plan years beginning before January 1, 2025. Accordingly, for plan years beginning in 2025 (including 2025 calendar plan years), HDHPs must resume imposing the standard minimum statutory deductible for telehealth and other remote care services in order for covered participants to maintain their HSA eligibility.
Note: The Telehealth Expansion Act currently proposed in Congress seeks to make the first-dollar telehealth relief permanent.
Reminder: First-Dollar Covid Testing/Treatment Expiration for Plan Years Ending On or After January 1, 2025
IRS relief since the start of the pandemic has also permitted HDHPs to waive the deductible and provide first-dollar coverage for medical care services and items related to testing and treatment of Covid. The IRS provided the relief to “eliminate potential administrative and financial barriers to testing for and treatment of COVD-19.”
The IRS has stated in Notice 2023-37 that this relief remains available only for plan years ending on or before December 31, 2024. Accordingly, the relief providing that plans will not fail to maintain HDHP status if they cover Covid testing/treatment prior to satisfaction of the applicable minimum deductible will expire for the 2025 plan year. HDHPs will need to return to imposing the standard minimum deductible for Covid testing and treatment in 2025 in order for covered participants to maintain their HSA eligibility.
For more details on everything HDHP/HSA, see our Newfront Go All the Way With HSA Guide.
Disclaimer: The intent of this analysis is to provide the recipient with general information regarding the status of, and/or potential concerns related to, the recipient’s current employee benefits issues. This analysis does not necessarily fully address the recipient’s specific issue, and it should not be construed as, nor is it intended to provide, legal advice. Furthermore, this message does not establish an attorney-client relationship. Questions regarding specific issues should be addressed to the person(s) who provide legal advice to the recipient regarding employee benefits issues (e.g., the recipient’s general counsel or an attorney hired by the recipient who specializes in employee benefits law).
