Male Sterilization and HDHP Coverage

In Notice 2018-12, released March 5, the IRS has taken the position that benefits for male sterilization and male contraceptives are not preventive care under Code Section 223.  Consequently, a high-deductible health plan (HDHP) that provides benefits for male sterilization and male contraceptives before the covered person satisfies the minimum annual deductible for HDHPs under the Code is not an HDHP.

Some states have required health plans to cover male sterilization and male contraceptives before the deductible is satisfied.  Also, individuals may have enrolled in plans that would otherwise qualify as HDHPs with the understanding that coverage for male sterilization and male contraceptives before the deductible is satisfied does not disqualify the plan from being an HDHP.  Therefore, Notice 2018-12 provides transition relief until 2020, where an individual will not be treated as failing to qualify as an eligible individual under the Code’s HSA rules if the individual is covered under a plan that is not an HDHP solely because it provides coverage for male sterilization and male contraceptives before the deductible is satisfied.  This transition relieve gives states an opportunity to eliminate or amend applicable laws.

Employers will want to ensure that their HDHPs do not cover male sterilization and male contraceptives as preventive care not subject to cost sharing before the deductible is satisfied and that any such plans are amended before 2020.

If you have questions about Notice 2018-12, call ASR Health Benefits at (616) 957-1751 or (800) 968-2449.