High-deductible health plans (HDHPs) can provide medical care associated with testing for and treatment of COVID-19 prior to satisfying the plan’s deductible, per IRS relief (Notice 2020-15) pending further guidance. As a result, individuals covered by an HDHP still can establish or contribute to a health savings account (HSA).
HDHPs and HSAs
An HDHP is a health plan that must limit the minimum annual deductible to $1,400 (indexed for 2020) for individual coverage and twice that amount for family coverage. It also must limit the sum of the annual deductible and other annual out-of-pocket expenses (other than premiums) for covered benefits to $6,900 (indexed for 2020) for individual coverage and twice that amount for family coverage.
HDHP-covered individuals may establish and contribute to HSAs. In general, an HSA is a tax-exempt trust or custodial account created to pay for the qualified medical expenses of the account holder and his or her spouse and dependents. HSAs generally provide tax-favored treatment for current medical expenses as well as the ability to save on a tax-favored basis for future medical expenses.