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March 12, 2020

IRS guidance allows coronavirus testing and treatment without endangering HDHPs and HSAs

In Notice 2020-15, the IRS allows (1) high-deductible health plans (HDHPs) to permit COVID-19 testing and treatment without having the minimum deductible satisfied and (2) individuals to maintain their health saving accounts (HSAs) when using these benefits.

Under IRC Section 223(c)(2)(A), individuals may make HSA contributions if they are covered by an HDHP and have no disqualifying health coverage (coverage that pays for care without a deductible). Under IRC Section 223(c)(2), HDHPs must satisfy certain requirements, including minimum deductibles and maximum out-of-pocket expenses.

Notice 2020-15 states that a health plan under IRC Section 223(c)(2)(A) "will not fail to be an HDHP merely because the health plan provides medical care services and items purchased related to testing for and treatment of COVID-19 prior to the satisfaction of the applicable minimum deductible. As a result, the individuals covered by such a plan will not fail to be eligible individuals under [IRC S]ection 223(c)(1) merely because of the provision of those health benefits for testing and treatment of COVID-19."

This relief is "[d]ue to the unprecedented public health emergency posed by COVID-19, and the need to eliminate potential administrative and financial barriers to testing for and treatment of COVID-19," according to Notice 2020-15.


Employers or insurers are not required to change the terms of a group health plan or insurance contract to provide treatment for COVID-19 before deductibles or out-of-pocket limits have been met. Notice 2020-15 merely eliminates the question of whether such a voluntary change would taint any HSA contribution. Some may have interpreted existing guidance under Notice 2004-23 as allowing COVID-19 testing under the existing "preventive care" exception in IRC Section 223(c)(2)(C); however, Notice 2020-15 both clarifies this point and provides relief for expenses associated with COVID-19 treatment without affecting any individual's eligibility for HSA contributions.

As the situation related to COVID-19 continues to evolve, it is anticipated that Treasury and the IRS may provide relief in other contexts as well.


Contact Information
For additional information concerning this Alert, please contact:
Compensation and Benefits Group
   • Christa Bierma (
   • Catherine Creech (
   • Stephen Lagarde (
   • Andrew Leeds (
   • Bing Luke (
   • Rachael Walker (



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