A New Era for Preventive Care: What benefits administrators need to know about updated IRS rules

The landscape of preventive care coverage is shifting, thanks to new guidance from the IRS. For benefits administrators, this development could change how you structure and communicate health plans to employees. We’re here to help you make sense of these changes and leverage them to enhance your benefits offerings.

What’s Changing?

The IRS expanded the definition of preventive care under high-deductible health plans (HDHPs). These plans now cover a wider array of preventive services without requiring employees to meet their plan’s annual deductible (self-only or family). Products and services now covered include over-the-counter oral contraceptives (including emergency contraceptives), male condoms, breast cancer screenings other than mammograms, continuous glucose monitors and certain insulin products.

This ruling aims to lower barriers to essential care, fostering better long-term health outcomes. Employees enrolled in HDHPs paired with health savings accounts (HSAs) stand to gain significantly, as these changes promote more proactive healthcare management.

Why It Matters for Benefits Administrators

1. Enhanced Plan Value: By incorporating these expanded preventive care options, HDHPs become more attractive, especially for employees managing chronic conditions. Employers would be wise to consult with their health plan carrier and advisors about adding these options to eligible preventative items and services.
2. Employee Engagement: These updates create a unique opportunity to re-educate employees about their benefits and promote the importance of using preventive care services.
3. Cost Control: Preventive care often reduces long-term healthcare costs by addressing issues before they escalate into expensive medical conditions.

What You Can Do

Here’s how to make the most of these changes:

• Update Your Benefits Education: Revise materials to highlight the newly covered services and explain how they fit into existing HDHP and HSA frameworks.
• Promote Preventive Care: Create campaigns to encourage employees to take advantage of these benefits. Clear communication is essential to drive awareness and usage.
• Optimize Your Benefits Platform: Partner with a platform like Alegeus to ensure employees have access to tools that maximize their benefits, from spending accounts to decision-support resources.

Looking Ahead

The IRS’s updated guidance reflects a growing emphasis on preventive care and proactive health management. By adapting your strategy now, you can help employees take full advantage of their benefits while positioning your organization as a leader in forward-thinking benefits administration.