BALTIMORE – The U.S. Internal Revenue Service (IRS) has issued a notice confirming that the waiving of cost-sharing arrangements by high-deductible health plans (HDHPs) in response to COVID-19 will not affect the tax status of contributions to a health savings account.
Issued March 11, Notice 2020-15 makes clear that individuals who participate in an HDHP and are covered for COVID-19 testing or treatment prior to satisfying the plan deductible may still make pre-tax contributions to a health savings account (HSA) without penalty.
“On behalf of the citizens of Maryland, I would like to thank the IRS for taking quick action on this,” said Maryland Insurance Commissioner Al Redmer, Jr. “It is crucial that we remove any barriers or potential barriers to testing and treatment.”
The IRS notice addresses the strict tax law requirements for HDHPs:
Due to the nature of this public health emergency, and to avoid administrative delays or financial disincentives that might otherwise impede testing for and treatment of COVID-19 for participants in HDHPs, this notice provides that all medical care services received and items purchased associated with testing for and treatment of COVID-19 that are provided by a health plan without a deductible, or with a deductible below the minimum annual deductible otherwise required under 2 section 223(c)(2)(A) for an HDHP, will be disregarded for purposes of determining the status of the plan as an HDHP.
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