Providing coverage for drugs and other treatments for chronic conditions before employees meet their plan’s deductibles does not significantly increase health plan premiums, new research shows. For employees, pre-deductible coverage makes health care more accessible.

The Affordable Care Act requires non-grandfathered health plans to cover certain preventative services without cost sharing, within certain guidelines. However, under IRS regulations, high-deductible health plans (HDHPs) could not pay for the treatment of
existing chronic conditions if plan enrollees’ healthcare expenses had not exceeded their deductible, as this would violate rules allowing contributions to Health Savings Accounts (HSAs).

Since July 2019, however, when the IRS issued
Notice 2019-45employers were given the option to cover 14 specific treatments for chronic conditions outside of HDHP deductibles, but are not required to do so.

These drugs and services are intended to treat diabetes, heart disease, asthma, depression and osteoporosis:

Take care of the specified conditions	For people diagnosed with
Angiotensin converting enzyme (ACE) inhibitors	Congestive heart failure, diabetes and/or coronary artery disease
Anti-resorptive therapy	Osteoporosis and/or osteopenia
Beta-blockers	Congestive heart failure and/or coronary artery disease
Tensiometer	Hypertension
Inhaled corticosteroids	Asthma
Insulin and other hypoglycemics	Diabetes
Screening for retinopathy	Diabetes
Peak flow meter	Asthma
glucometer	Diabetes
Hemoglobin A1c test	Diabetes
International Normalized Ratio (INR) Test	Liver disease and/or bleeding disorders
Low Density Lipoprotein (LDL) Test	heart disease
Selective serotonin reuptake inhibitors (SSRIs)	Depression
Statins	Heart disease and/or diabetes

A small effect on premiums

A May 2022 briefing note by the Employee Benefits Research Institute (EBRI),

The impact of extending pre-deductible coverage in HSA-eligible health plans on premiums, analyzed claims data and found that the effect on health plan premiums of expanding pre-deductible coverage for the above 14 services was small. Estimated premium increases range from virtually zero to 1.5%.

“The cost of almost all of the 14 services allowed to be covered before deductible is relatively low when spread across the entire population,” EBRI reported. Further, “users of the 14 health care services are generally high users of health care in general…. Therefore, even when service coverage is provided before the deductible, these users are likely to continue to pay their deductible. »

Employers can also recover pre-deductible cover costs “by imposing a pre-deductible co-payment or co-insurance”, advised the EBRI.

Employers extend pre-deductible coverage

Last fall, EBRI reported that three-quarters of large U.S. employers offering HSA-eligible health plans
had expanded pre-franchise coverage for drugs and services that control chronic diseases, in response to IRS Notice 2019-45. The data comes from a survey of benefits decision makers from 354 U.S. companies with at least 200 employees, conducted in July and August 2021.

The researchers found that most employers (81%) would add pre-deductible coverage for additional health care services if the law allowed it.

“Even in the absence of evidence that extending pre-deductible coverage will only increase premiums by a small amount, employers were already signaling that they would add additional services on a pre-deductible basis if the IRS allowed it,” said Paul Fronstin, director. research on the health benefits of EBRI.

Additional pre-deductible cover sought

“There is bipartisan, bicameral legislation that has been introduced in the United States Congress that
provide additional flexibility to extend pre-deductible coverage services that manage chronic disease,” said A. Mark Fendrick, director of the Value-Based Insurance Design Center at the University of Michigan. financial burdens on employees caused by rising health care costs.

Related SHRM articles:

Health plans are faced with decisions about coverage for preventative screenings,
SHRM onlineMarch 2022

Employers extend pre-deductible coverage for HSA-eligible health plans,
SHRM onlineNovember 2021

The IRS allows health plans to cover more treatments before the deductible is reached,
SHRM onlineJuly 2019