IRS Updates on Chronic Condition Expenses Eligible for HSA-Compatible High Deductible Health Plans

The Internal Revenue Service and Department of Health and Human Services recently issued guidance that HDHPs eligible for HSA consideration consider certain popular medical services, medications, and devices such as insulin, inhalers, and statins as “preventative care”. Plans that comply with this advice could cover such items prior to reaching a deductible threshold.

Preventative care and services before meeting the deductible were highlighted above for emphasis, as this could represent a major change for those with chronic conditions who previously paid out-of-pocket until reaching their annual out-of-pocket maximum. HDHPs usually don’t provide benefits until after meeting their minimum annual deductible; however, one does not need a deductible when providing preventive care (according to HDHP/HSA rules).

HDHPs typically feature extremely high annual deductibles ($1,400 minimum for individuals and $2,800 for families in 2021), with high maximum out-of-pocket costs ($7,000 individual/$14,000 family) to offset insurance coverage of costs; thus making their annual costs even greater for those living with chronic conditions with HSA-eligible plans.