High-Deductible Health Plans Notice Regarding IRS Guidance on COVID-19 

Many employers are wrestling with the impact of the Coronavirus (COVID-19) in the U.S. and its impact on the workforce. Many employers also offer high-deductible health plans (HDHP) that can only cover the specified preventive care until an individual or family satisfies the high deductible set by the health plan.

The Internal Revenue Service has provided relief for employers who want to cover the cost of the COVID-19 diagnostic test and treatment, but who offer health benefits through an HDHP. Notice 2020-15 permits an employer to amend its HDHP to cover all medical services received and items purchased associated with testing for and treatment of COVID-19. It can do so without requiring the individual to meet the HDHP’s deductible or other cost sharing, and it can implement this process without causing the HDHP to fail to qualify as an HDHP and without denying the employee the ability to contribute to a Health Savings Account.

This change is not required under federal tax law. Therefore, employers have the option to choose to adopt it. However, some states have taken steps to require insured plans to provide this coverage. Employers with self-insured plans may consider whether to make such an amendment and, if they so elect, must comply with all of the normal requirements for a change in the benefit plan coverage, such as amendment, SMM distribution, and working with the third-party administrator and any insurance carrier. Employers with fully insured plans that consider such an amendment must contact the insurance company for their plan.