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IRS Ruling Affects Male Sterilization Coverage in HDHP/HSA Plans

04/06/18

  07:42:00 pm, by MedBen5   , 218 words,  
Categories: News, Preventive care, Health savings accounts (HSAs)

IRS Ruling Affects Male Sterilization Coverage in HDHP/HSA Plans

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A recent IRS notice will no longer allow first-dollar coverage of male sterilization and other forms of male contraception under high-deductible health plans (HDHPs) paired with health savings accounts (HSAs)... a decision that effectively overrules current laws in several states.

According to IRS Notice 2018-12, vasectomies and male contraception do not meet the definition of preventive care, and therefore individuals in a qualified HDHP paired with an HSA will not receive coverage until the annual deductible is met. With the introduction of this rule, a participant who receives male contraception benefits before meeting the HDHP deductible will not be eligible for HSA contributions. (The ruling does not affect female contraceptive coverage, which is still considered preventive care.)

Prior to this IRS guidance, multiple states, including Illinois, Vermont, and Maryland, required that health insurance policies issued in those states must cover vasectomies or male contraceptives without a deductible or with a deductible below the minimum deductible for an HSA-qualifying HDHP. The IRS is allowing these states until 2020 to transition to the federal rule, so individuals covered by HDHPs that paid for male contraception expenses below the deductible will still be able to make contributions to their HSA.

MedBen clients with questions regarding the IRS Notice are welcome to contact Director of Administrative Services Sharon A. Mills at (800) 423-3151, Ext. 438 or smills@medben.com.

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