On March 11, 2020 the Internal Revenue Service (IRS) issued Notice 2020-15 which ensures that people with high deductible health plans (HDHPs) will not be disqualified from contributing to a health savings account (HSA) if their HDHP provides medical care and items purchased related to testing for and treatment of COVID-19 prior to the minimum required deductible being satisfied.
This is an important protection for your employees and means that employers can provide COVID-19 diagnosis and treatment coverage as part of their HDHPs, while ensuring HSA contributions remain tax-free. Without this guidance, the coverage for diagnosis and treatment provided before the deductible was satisfied would have potentially made HSA contributions subject to taxes and penalties. Employers should review their plans with their legal counsel and health consultants to determine if any plan changes are required in order to utilize this guidance and provide pre-deductible testing and treatment coverage for COVID-19 in an HDHP.
Beyond this guidance, Congress is considering a number of actions aimed at offsetting the potential economic impact of COVID-19 for employers and individuals. Some proposals (not finalized) include mid-year employer and/or employee payroll tax adjustments, paid sick leave for employees, and certain other relief for impacted employers. Alight is actively monitoring these proposals and will provide updates and analysis as plans are released. In addition, we are prepared to assist clients implementing any changes that may impact payroll, benefits and employee communications. Alight is actively monitoring these proposals and will provide updates and analysis as plans are released.