Benefit Plan FAQs on COVID-19

IRS Guidance Related to Coronavirus Testing/Treatment for HDHPs/HSAs

Last week, the IRS issued guidance confirming that high-deductible health plans with health savings accounts can provide coronavirus testing and treatment at no cost to participants without affecting eligibility for health savings accounts.  Without this guidance, any non-preventive services provided to such participants before meeting their plan deductible would have disqualified the participants from health savings account eligibility.  This guidance is welcome, as employers attempt to remove obstacles to testing and treatment for coronavirus.

Currently, the IRS guidance is specifically limited to coronavirus testing and treatment.  Given the advice the public has been receiving about social distancing and the cautions about burdening the healthcare system, many health plans have also been expanding their coverage to provide telemedicine without cost-sharing to plan participants.  To the extent such telemedicine visits are to test or treat coronavirus, this will be covered by the current IRS guidance.  However, under current guidance, if the telemedicine visit is for a different reason not related to coronavirus testing or treatment, then covering it before a participant with a health savings account has met their current HDHP deductible will disqualify the participant from health savings account eligibility.  CMS recently expanded telemedicine access for Medicare recipients, so the regulatory guidance on the interaction with HDHPs/HSAs may evolve further.

Market Volatility and Participant-Directed Investments

Employers may be wondering what they should say to their employees about market volatility and 401(k) or other retirement plans which have participant-directed investments. If employers give investment advice, they may have unwanted fiduciary liability exposure. To avoid fiduciary concerns, employers may want to focus instead on investment education. Employers may want to check in with their 401(k) recordkeepers and providers to see if education materials have been or are planned to be sent. In addition, some providers have vetted tools on their websites that could be helpful to employees in answering their questions. Finally, employers could direct employees to speak with employees’ financial advisers.