Coalition Encourages Treasury and IRS To Expand HSA Pre-Deductible Services to Include Mental Health and Substance Use Disorder Services


In November 2021, the Smarter Health Care Coalition (SHCC) sent a letter to the Department of the Treasury and the Internal Revenue Service (IRS) calling for the expansion ofthe definition of preventative services to include treatments for mental health and substance use disorders. Generally, high-deductible health plans that are linked to health savings accounts (HDHP-HSA) are prohibited from covering services before the plan’s minimum deductible is met. However, the IRS created a safe harbor exception to this rule which allows plans to cover certain preventative services prior to the minimum deductible being met. In 2019, the Internal Revenue Services (IRS) released new guidance expanding the definition of preventative care to include care for chronic conditions if the care was (1) low-cost; (2) had medical evidence supporting high cost efficiency for preventing the exacerbation of chronic condition and the development of a secondary conditions; and (3) had a strong likelihood, documented by clinical evidence, that the service would prevent the chronic condition to worsen and prevent the development of a secondary condition that would require significantly higher treatment costs. Now, in 2021 SHCC is calling on the IRS to expand that definition once again. The letter recognizes that the COVID-19 pandemic has exacerbated the mental health crisis in the United States and that patients need access to mental health services now more than ever. The letter encourages the IRS to expand the current guidance and signal to employers that they can take action to help address the rising rate of chronic mental health conditions. SHCC’s letter to the IRS can be read here.  



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