IRS Expands List of Preventive Care Benefits for HDHPs
Feb 24, 2025
IRS Expands List of Preventive Care Benefits for HDHPs
The IRS has announced an important update regarding High-deductible Health Plans (HDHPs). The agency now permits these plans to cover a broader range of preventive care items before deductibles are met, including over-the-counter oral contraceptives, emergency contraceptives, and male condoms—whether or not they are obtained with a prescription. This change presents an opportunity for employers to enhance their benefit offerings. In this blog, we will explore the implications of this guidance and what employers need to consider when reviewing their HDHPs.
IRS Notice 2024-75: Expanded Preventive Care Benefits for HDHPs
On October 17, 2024, the IRS issued Notice 2024-75, expanding the range of preventive care benefits that high-deductible health plans (HDHPs) can provide without a deductible or with a deductible below the minimum threshold. The updated list includes:
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Over-the-counter (OTC) oral contraceptives, including OTC birth control pills and emergency contraceptives, are available to individuals who can become pregnant, with or without a prescription.
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Male condoms, which can be purchased without a prescription, are accessible to all individuals covered by the HDHP, regardless of gender.
This guidance allows employers to enhance their HDHP offerings and ensure better access to essential preventive care.
New Preventive Care Guidelines for HDHPs: Expanded Coverage Details
The Notice further clarifies that the following items and services qualify as preventive care under HDHP regulations:
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Individuals without a breast cancer diagnosis have access to a comprehensive range of breast cancer screenings, including options beyond mammograms.
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Continuous glucose monitors are available for those with diabetes, ensuring consistent access to this essential monitoring tool.
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Select insulin products are covered, regardless of whether they are prescribed for diabetes treatment or to prevent associated complications.
Understanding HDHPs and Preventive Care
To contribute to a Health Savings Account (HSA), individuals must be enrolled in a High-deductible Health Plan (HDHP) without disqualifying health coverage. A key feature of an HDHP is that it may only pay for benefits other than preventive care once the minimum deductible is met. However, preventive care can be covered with a low deductible or none without impacting HSA eligibility.
Under the Affordable Care Act (ACA), non-grandfathered health plans must cover specific recommended preventive services without cost-sharing, such as copays or deductibles. The ACA permits over-the-counter (OTC) preventive products to be covered without cost-sharing only when prescribed by a healthcare provider.
Eligibility for HSA Contributions
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Required Coverage: Individuals must be enrolled in an HDHP to contribute to an HSA.
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Preventive Care Exception: HDHPs may cover preventive services without requiring a deductible, supporting HSA eligibility as long as other requirements are met.
HDHP Requirements and Preventive Care Coverage
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Minimum Deductible Compliance: HDHPs can only pay benefits for preventive care once the minimum deductible is met.
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ACA and First-Dollar Coverage: The ACA mandates non-grandfathered health plans to cover specific preventive services without any out-of-pocket cost to the member, often known as “first-dollar” coverage.
Over-the-Counter Preventive Products
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Prescription Requirement: Under the ACA, an HDHP can only cover OTC preventive products without cost-sharing if a healthcare provider prescribes them.
By understanding these regulations, individuals and employers can ensure that HSA contributions align with HDHP requirements and that preventive care coverage complies with ACA guidelines, maximizing benefits for HSA-eligible participants.
Effective Dates for HDHP Preventive Care Changes
The IRS Notice 2024-75 introduces various changes to High-deductible Health Plans (HDHPs) with distinct retroactive effective dates for each provision.
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OTC Oral Contraceptives and Male Condoms: Coverage is effective for plan years starting or after December 30, 2022.
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Breast Cancer Screenings: Coverage is effective from April 12, 2004, and includes all screenings for individuals without a breast cancer diagnosis.
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Continuous Glucose Monitors: Coverage is effective from July 17, 2019, for individuals diagnosed with diabetes.
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Selected Insulin Products: Coverage is effective for plan years beginning after December 31, 2022, and includes certain insulin products, regardless of the prescription purpose.
These effective dates help ensure that HDHPs comply with the latest preventive care requirements and support better access to essential health services.
Conclusion: Strategic Adaptation to New Preventive Care Regulations
The IRS has introduced significant changes to the preventive care benefits for High-deductible Health Plans (HDHPs). These updates present a key opportunity for employers to enhance their health benefit offerings. HDHPs must meet certain minimum deductible requirements, but preventive care can be provided without affecting Health Savings Accounts (HSAs) eligibility. The Affordable Care Act (ACA) also mandates that certain preventive services be covered without cost-sharing, reinforcing the importance of reviewing health plan offerings in line with these new regulations.
For Custom Benefit Consultants (CBC), Inc., these developments offer a valuable opportunity to support employers in navigating the expanded preventive care guidelines. Through strategic consulting, we can help employers maximize the value of their benefits packages, ensuring that employees have access to critical preventive care services without cost-sharing that aligns with the new regulations. As the health benefits landscape evolves, CBC’s expertise will be essential in helping employers adapt to these changes and deliver optimal health solutions to their workforce.
Paragraph- Is your organization ready to adapt to these new preventive care requirements? Let Custom Benefit Consultants, Inc. help you stay compliant and enhance your health benefits package. Contact us today to schedule a consultation and ensure your HDHPs are current with the latest regulations!
FAQs
1: What Preventive Care Benefits Can HDHPs Cover Before the Deductible is Met?
HDHPs can now cover a broader range of preventive care benefits before the deductible is met, including over-the-counter (OTC) oral contraceptives, emergency contraceptives, male condoms, breast cancer screenings, continuous glucose monitors, and selected insulin products. These benefits may be provided with no or low deductible, improving access to essential healthcare services.
2: Can I Contribute to an HSA If My HDHP Covers Preventive Care Before the Deductible is Met?
Yes, you can still contribute to an HSA if your HDHP covers preventive care before the deductible is met. HDHPs can cover preventive care with no or a low deductible without affecting your eligibility for HSA contributions, as long as all other requirements are met.
3: Do OTC Preventive Products Like Birth Control and Condoms Require a Prescription Under the New IRS Guidelines?
Under the new IRS guidelines, HDHPs can cover OTC preventive products like oral contraceptives and male condoms without a prescription. However, a healthcare provider must prescribe these products by ACA requirements to qualify for coverage without cost-sharing.
4: What Are the Effective Dates for the Expanded Preventive Care Benefits Under IRS Notice 2024-75?
The IRS updates introduce different effective dates for each provision. OTC oral contraceptives and male condoms are covered starting from the plan years after December 30, 2022. Breast cancer screenings have been covered since April 12, 2004, while continuous glucose monitors and selected insulin products are covered starting from July 17, 2019, to December 31, 2022.
5: How Can Custom Benefit Consultants (CBC) Help My Company Stay Compliant with the New IRS Preventive Care Guidelines?
Custom Benefit Consultants (CBC) can help your company comply with the new IRS preventive care guidelines by reviewing your HDHP offerings, ensuring they meet the latest regulations, and advising on optimizing your health benefits. CBC can also assist with communication strategies to keep your employees informed about these important healthcare changes.
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Kenneth Bahl
Kenneth Bahl is the President of Custom Benefit Consultants, Inc., where he has played a pivotal role in leading the company’s mission to create sustainable healthcare solutions that not only address modern challenges but also deliver meaningful savings. With over two decades of experience in the field, Kenneth’s expertise in benefits administration and employee benefits analysis has been instrumental in the company's success. Under his leadership, Custom Benefit Consultants, Inc. has become a trusted partner for employers seeking innovative solutions to meet the needs of their teams. In addition to his leadership role at Custom Benefit Consultants, Inc., Kenneth is also a key player at Control Source, Inc., where he has helped redefine administrative solutions for clients. Through the company’s advanced technology platform, which includes absence management, billing administration, and other dynamic services, Kenneth has enabled businesses to reduce legal risks, lower costs, and enhance operational efficiency. His work ensures that these scalable solutions seamlessly integrate with company culture and branding, positively impacting both employee experience and the company’s bottom line.
Education
Kenneth holds a degree in Healthcare Administration, which laid the foundation for his extensive career in the healthcare benefits sector. His academic background, combined with years of hands-on experience, has given him the expertise to navigate the complexities of employee benefits and help organizations optimize their benefits programs.
Personal Life
Outside of his professional endeavors, Kenneth enjoys a fulfilling family life. He values the balance between his dynamic career and his growing family, which now includes six grandchildren. This personal connection enriches his perspective on the importance of supporting individuals and organizations in ways that foster long-term success, well-being, and positive relationships
