Preventative prescriptions and HSA eligibility

[JDuns]

We all know that a plan sponsor may cover PREVENTATIVE prescription drug coverage below the deductible without endangering the HSA eligibility status of a plan participant.

My question is what is a "Preventative prescription drug"?

IRS Notice 2004-23 sets the standard as "any service or benefit intended to treat an existing illness, injury or condition." The IRS had requested comments on "the extent wo which drug treatments, either solely by prescription or as part of an overall treatment regimen should be treated as preventative care and the appropriate standards for differentiating between drug treatments that would be considered preventive and those that would not." I have not been able to locate any further guidance on the definition of preventative prescriptions.

Various PBMs have different interpretations of what prescriptions are "preventative" under this standard. If the IRS later determines that a plan has reimbursed something as preventative that did not qualify, is the whole plan no longer a HSA compatible HDHP?

Any assistance would be appreciated.

[jmor99]

I don't know the answer to your first question. I'll have to wait for others more knowledgeable than I.

But on the second question, I would think that the answer would depend on whether or not the plan willfully violated the law. Since this is a gray area at this point I don't think the plan could be disqualified. It also might depend on other factors, such as--was it done just for Key/HCE employees, etc.

[leevena]

JDuns...you are correct. There are no accurate descriptions/explanations of preventitve prescription drugs as of yet. Don't know when a clarification will occur. I am guessing that groups/adminstrators/enrollees, etc will walk softly on this issue, but this is my own opinion. Some will use HSA funds for drugs correctly and others will not.

As to the second part, about IRS finding plans in violation. I don't know. But I would tend to believe that if the participants were acting in good faith, the most they would get is a over-turn of their expenses. Again, just my opinion.