Recent guidance provides some insight into what qualifies as a medical expense and what qualifies as a permissible preventive cost that can be covered by an HSA qualifying high deductible health plan without jeopardizing HSA eligibility. Proposed regulations have been issued to amend the ACA first dollar preventive coverage.
Internal Revenue Code § 213(d) defines deductible medical expenses. The recently issued guidance adds male condoms which means they can be reimbursed on a tax favored basis from a health plan, including spending accounts such as health FSAs, HRAs and HSAs. Speaking of HSAs, to be HSA eligible an individual must be covered by a high deductible health plan. No expenses other than expenses for preventive services can be reimbursed prior to satisfaction of the minimum statutory deductible. The list of preventive services that will not jeopardize HSA eligibility is expanded to include male condoms, over-the-counter contraceptives, breast cancer screening in addition to mammograms, continuous glucose monitors and certain insulin products.
Regulations are proposed that would add over-the-counter oral contraceptives to the required ACA preventive services. As a reminder, the ACA requires that ACA preventive services be offered at no cost, applicable to non-grandfathered plan.
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