Preventive Health Services With No Deductible Qualify as High-Deductible Health Plans

In its latest guidance on health care rules, the IRS issued a notice on Monday clarifying that preventive health services that are provided without a deductible under a health insurance plan will not disqualify a high-deductible health plan (HDHP) (Notice 2013-57).

Under Sec. 223, individuals who participate in a health plan with a high deductible are permitted a deduction for contributions to health savings accounts set up to help pay the individuals’ medical expenses. Under Sec. 223(c)(2)(A), an HDHP cannot provide any benefits for that year until the minimum deductible for that year is satisfied. However, Sec. 223(c)(2)(C) provides an exception that a plan will not fail to be an HDHP if it has no deductible for preventive care.

According to Notice 2013-57, for these purposes preventive care means anything that would qualify as preventive care under Notice 2004-23 or Notice 2004-50, regardless of whether it would qualify as preventive care under Section 2713 of the Public Health Service Act. But preventive care also includes preventive health services required to be provided by a group health plan or a health insurance issuer by Section 2713 of the Public Health Service Act. The notice explains that Section 2713 of the Public Health Service Act, which was added by the Patient Protection and Affordable Care Act, P.L. 111-148, requires group health plans and health insurance issuers to offer certain preventive health services without imposing cost-sharing requirements. As a result, the health insurance companies are prohibited from charging a deductible for this type of care.