IRS expands preventive care benefits for high deductible plans

The IRS recently released guidance (Notice 2024-75) expanding the list of preventive care benefits permitted to be provided by a high deductible health plan (HDHP) under Section 223(c)(2)(C) without a deductible, or with a deductible below the applicable minimum deductible for the HDHP.

Effective for plan years that begin on or after Dec. 30, 2022, Notice 2024-75 generally provides the following:

• Preventive care for purposes of Section 223(c)(2)(C) includes all benefits for OTC oral contraceptives for a covered individual potentially capable of becoming pregnant, including, but not limited to, OTC birth control pills and emergency contraception, regardless of whether they are purchased with a prescription.
• Preventive care for purposes of Section 223(c)(2)(C) includes all benefits for male condoms, regardless of whether they are purchased with a prescription and regardless of the gender of the individual covered under the HDHP who purchases them.
• The reference in Notice 2004-23 to breast cancer screening should be changed to “Breast Cancer (e.g., mammograms, magnetic resonance imaging (MRIs), ultrasounds, and similar breast cancer screening service),” effective as of the date of publication of the notice (April 12, 2004).
• Preventive care for purposes of Section 223(c)(2)(C) includes all benefits for continuous glucose monitors that have preventive care functions.
• An HDHP may provide benefits for Section 223(c)(2)(G) insulin products before and individual satisfies the minimum annual deductible for an HDHP under Section 223(c)(2)(A), whether prescribed for treatment or prevention.

The IRS also released Notice 2024-71 to provide a safe harbor that treats amounts paid for condoms as amounts paid for medical care under Section 213(d). 

Section 213 generally allows an individual taxpayer an itemized deduction for expenses paid during the taxable year, not compensated for by insurance or otherwise, for medical care of the taxpayer, the taxpayer’s spouse, or the taxpayer’s dependent, to the extent that such expenses exceed 7.5% of the taxpayer’s adjusted gross income.

In addition, amounts treated as paid for medical care under Section 213(d) are generally eligible to be paid or reimbursed under a health FSA, Archer MSA, HRA, or HSA. However, if an amount paid for medical care is paid or reimbursed under a health FSA, Archer MSA, HRA, HSA, or any other health plan or otherwise, it is not a deductible expense under Section 213.

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