The Internal Revenue Service (IRS) issued Notice 2023-37 on June 23, 2023, regarding high deductible health plans (HDHPs) and expenses related to COVID-19. This notice was issued in response to the end of the COVID-19 National Emergency and Public Health Emergency, which occurred in May of this year, and provides clarifying guidance on the impact on COVID-19 relief. This new guidance modifies Notice 2020-15 as it relates to the relief when paying for COVID-19 testing and treatment, which currently can be paid for below the minimum required HDHP without impacting health savings account (HSA) eligibility. The IRS has indicated that the relief will only apply to plan years ending on or before December 31, 2024. For subsequent plan years, an HDHP is not permitted to provide health benefits associated with testing for and treating COVID-19 without a deductible, or with a deductible below the minimum deductible (for self-only or family coverage) for an HDHP, except as otherwise provided in this notice.

HDHP with HSA Background

Section 223 established that for individuals to make contributions to a HSA, they must be enrolled in a health plan which meets the minimum deductible requirements. For 2023, the minimum deductible is $1,500 for self-only coverage and $3,000 for family coverage (aggregate). Other than preventive care, all services must apply to the deductible before the health plan can make any payments. Please see our Plan Limits page for up-to-date limits for HSAs and more.

HSA and Preventive Care

This current notice also clarifies how COVID-19 expenses may or may not be considered preventive care for the purpose of HSA rules. Notice 2004-23 provides that preventive care under section 223(c)(2)(C) includes, but is not limited to, screening services as specified in the Appendix to Notice 2004-23. However, preventive care does not generally include any service or benefit intended to treat an existing illness, injury, or condition, and the safe harbor does not include screenings for common and episodic illness like the flu. The IRS concludes that COVID-19 screening (testing) does not meet the safe harbor and will not be treated as preventive care for purposes of HSAs, effective as of the date of publication of this notice.

In addition, consistent with the position taken in Question and Answer 7 of FAQs About Affordable Care Act and COVID Aid, Relief and Economic Security Act Implementation Part 59, this notice provides that items and services recommended with an “A” or “B” rating by the U.S. Preventive Services Task Force (USPSTF) on or after March 23, 2010, are treated as preventive care for purposes of section 223(c)(2)(C) of the Code, regardless of whether these items and services must be covered, without cost sharing, under PHS Act section 2713. Accordingly, if COVID-19 testing were to be recommended with an “A” or “B” rating by the USPSTF, then that testing would be treated as preventive care under section 223(c)(2)(C) of the Code, regardless of whether it must be covered, without cost sharing, under PHS Act section 2713.