Good news for companies that offer a high-deductible health plan (HDHP) and a health savings account (HSA) … and their employees.
More preventive treatments and meds for chronic conditions will now be covered before employees satisfy their deductible.
That’s thanks to IRS Notice 2019-45. A few examples of what’s now in-bounds:
- Medications: insulin (diabetes), beta-blockers (coronary artery disease) and statins (heart disease), and
- Tests: glucometers (diabetes), peak flow meters (asthma) and blood pressure monitors (hypertension).
Even better: The new ruling goes into effect immediately. Which means you can get the word out to employees in time for open enrollment.
Some background info
This new ruling stems from an executive order issued in June to help those with chronic conditions afford their meds. The Treasury expanded the use of HSAs to cover low-cost preventive care.
This has the potential to save employers money since when folks forgo drugs it often leads to more serious – and much more expensive – health conditions.
Employment attorneys are suggesting that even if you haven’t previously implemented one of these types of health plans, this change may be enough to make you want to.
Avoiding the fatal flaw in these plans
This latest development may also help with a problem that’s dogged HDHPs for years: Employees are holding back on key services to save themselves money.
Studies have shown that healthcare costs may be dropping for businesses that switched to HDHPs. But that’s because employees are skipping treatments they need!
The University of California reviewed the medical claims and spending patterns of more than 150,000 dependents and employees of one large employer that had moved from a PPO plan with no deductibles to an HDHP with the same provider.
What researchers found: The employer’s annual healthcare spending dropped 19%, from $750M-$608M.
But, after employees exceeded the plan’s high deductible and started using the plan, few made wise healthcare choices, researchers said.
So whether you’re just putting an HDHP in place or have had one for years, you’ll want to increase your communication efforts to ensure that employees understand HDHPs and how to use them.
Being ready for 2020
- HSA contribution limits (employer + employee): $3,550 for self-only coverage (up $50); $7,100 for families (a $100 increase)
- HDHP minimum deductibles: $1,400 for self-only (up $50); $2,800 for families (up $100)
- HDHP maximum out-of-pocket amounts (deductibles, co-payments, etc., but not premiums): $6,900 for self-only (up $150); $13,800 for families (a $300 jump), and
- HSA catch-up contributions for ages 55+: holds again at $1,000.