HDHPs and Expenses Related to COVID-19

On March 11, 2020, the IRS issued Notice 2020-15 which announced that high deductible health plans (“HDHP”) may offer testing and treatment for COVID-19 without co-pays or deductibles.  Plan sponsors are not required to offer these services without cost-sharing but are permitted to do so if they choose.


Notice 2020-15 provides that an HDHP will not fail to be an HDHP merely because the plan provides medical care services and items purchased related to testing for, and treatment of, COVID-19 with zero cost-sharing or prior to the satisfaction of the applicable minimum deductible.   The Notice also clarifies that individuals covered by an HDHP that provides testing and treatment without cost-sharing are still eligible to contribute to an HSA.


In addition to the IRS Notice, other action is being taken to combat this virus.  Several insurance companies have announced that they are waiving any cost-sharing or pre-approvals that might have been previously required for COVID-19 related testing.  In addition, Cigna Corp. announced that it has changed the terms of its administrative services only (“ASO”) self-insured clients to eliminate cost-sharing for coronavirus tests unless the plan sponsor opted out.  Finally, two Democratic members of Congress recently introduced legislation (HR 6173) to require insurance companies and self-insured health plans to cover the full cost of the coronavirus diagnostic test and prevent them from passing those costs on in the form of higher premiums.


Employers should reach out to their health insurance companies and ASOs to inquire about how their plan can be modified to address COVID-19.  In addition, as addressed in our recent blog post regarding practical approaches, employers should review their paid time-off and other policies to make sure they are doing what is required in these unique times.

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