The IRS issued Notice 2023-37 regarding high-deductible health plans (HDHPs) that continue to cover COVID-19 testing and treatments beyond plan years that end on or before December 31, 2024 (ie- plan years that begin in 2025).
As a result of the end of the COVID emergency period, the IRS released Notice 2023-37 which modifies previous guidance issued back in 2020. Under the 2020 guidance, HDHPs were temporarily allowed to pay for COVID-19 testing and treatments before the deductible (as first-dollar coverage), without causing an individual to lose eligibility for an HSA.
This latest notice says that, due to the end of the COVID-19 emergency period, the relief described in the 2020 guidance is no longer needed and will only be allowed for plan years ending on or before December 31, 2024. Plans that begin on or after January 1, 2025, will no longer be able to cover COVID-19 testing and treatments as first-dollar coverage/preventive care and still be considered qualified HDHPs.
Employers should adjust coverage for HDHPs for the 2025 plan years, and incorporate any new coverage parameters in participant communications, such as open enrollment and new hire materials, benefit guides, plan documents, and summary plan descriptions. However, employers may choose to cover these items as preventive care through the 2023 and 2024 plan years without adversely affecting HSA eligibility.
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