- Over-the-counter (OTC) oral contraceptives
- Male condoms
- All types of breast cancer screenings for individuals diagnosed with breast cancer
- Continuous glucose monitors for individuals diagnosed with diabetes
- Certain insulin products.
Read on for more information
Notice 2024-75
HDHP Background
A high-deductible health plan (HDHP) is a health plan with prescribed minimum deductible and maximum out-of-pocket amount limits. To be eligible to contribute to a health savings account (HSA), individuals must be covered by an HDHP (and not be enrolled in other disqualifying health coverage). Generally, an HSA-compatible HDHP cannot pay for benefits until the applicable minimum deductible for that plan year is satisfied. However, Internal Revenue Code (IRC) Section 223(c)(2)(C) provides a safe harbor for preventive care to be covered on a first-dollar basis and before satisfying an HDHP’s deductible.Preventive care generally does not include any service or benefit intended to treat an existing illness, injury, or condition[1].
ACA Preventive Care Services Mandate
As a reminder, the Affordable Care Act (ACA) requires non-grandfathered health plans to cover a range of recommended preventive services without participant cost-sharing. This means these preventive services must be covered with no deductibles, copayments, or coinsurance (often referred to as “first-dollar coverage”).Preventive services include screening tests, immunizations, behavioral counseling, and medications that can prevent the development or exacerbation of diseases and health conditions and include the following:
- Evidence-based items or services with an “A” or “B” rating included in the current recommendations from the U.S. Preventive Services Task Force (USPSTF), including cancer screenings, other disease screenings, and PrEP coverage to prevent transmission of HIV.
- Vaccinations recommended by the Advisory Committee (ACIP) and endorsed by the Director of the Centers for Disease Control and Prevention (CDC), including childhood and adult vaccinations, including COVID-19 vaccinations.
- Women’s health services recommended by the Health Resources and Services Administration (HRSA) and endorsed by the Secretary of Health and Human Services, including prenatal care, contraceptives, breastfeeding services/supplies, and wellness examinations.
- Preventive care and screenings recommended for infants, children, and adolescents provided for in other HRSA guidelines.
Notice Guidance
IRS Notice 2024-75 expands the list of preventive care benefits and services that are permitted to be covered by HDHPs without first satisfying the deductible, or with a deductible below the minimum annual deductible.
Proposed Rule Expanding Coverage of OTC Contraception Under the ACA (Now Withdrawn)
UPDATE: On Jan. 14, 2025, federal agencies withdrew this proposed rule outlined below.
While on the general topic of OTC contraceptives discussed above, the federal agencies released a proposed rule on October 21, 2024, that, when or if finalized, would expand access to OTC contraceptive coverage without cost-sharing under the ACA’s preventive care mandate.
First-dollar OTC contraception coverage: Health plans would be required to cover recommended OTC contraceptive items without requiring a prescription and without participant cost-sharing.
First-dollar coverage of prescribed contraception: Health plans would be required to cover every FDA-approved contraceptive drug or drug-led combination product without cost-sharing unless the plan also covers a therapeutic equivalent without cost-sharing.
Plan disclosure: Health plans would also be required to disclose to plan participants that OTC contraception is covered without requiring a prescription and without participant cost-sharing.
Employer Next Steps
Employers sponsoring HSA-compatible HDHPs are advised to consult with their insurance carriers (for fully insured plans) or third-party administrators (for self-funded plans) to determine next steps with respect to cost-sharing plan design in compliance with the revised guidance.
These next steps will presumably include considering the financial impact to the HDHP when deciding whether or not to cover these OTC items (both oral contraceptives and male condoms) without a deductible.
On a related HSA topic, employers should be aware that the temporary HSA telehealth relief extended under previous COVID-related federal legislation will expire on December 31, 2024, absent an extension by Congress. Employers who adopted this optional measure for their HSA-qualifying HDHPs should prepare to implement cost-sharing for telehealth (and remote care services) starting on January 1, 2025 for HDHP enrollees.
Finally, employers should monitor the progress of the proposed rule expanding coverage of OTC contraception under the ACA, as detailed above.