IRS to Phase Out Pandemic-Period HSA Rules

The Internal Revenue Service is phasing out the emergency rules it adopted to help health savings account users get through the COVID-19 pandemic.

The IRS announced last week, in IRS Notice 2023-37, that it plans to cut off access to the emergency rules given in IRS Notice 2020-15 — which applies to HSA-compatible, high-deductible health plans — for plan years ending after Dec. 31, 2024.

In practice, the notice means that the last HSA-compatible health plans that can use the special pandemic period rules will be ones with plan years starting on or before Jan. 1, 2024.

HSA users must combine HSAs with high-deductible health plans. Notice 2020-15 let HSA-compatible plans cover COVID-19 tests and treatments without making patients pay the usual HSA deductibles.

Notice 2023-37 will require the plans to impose deductibles before paying for COVID-19 tests and treatments. Because the government classifies COVID-19 vaccines as preventive care, plans can pay for COVID-19 vaccines before patients meet their deductibles.