In March 2018 the IRS issued Notice 2018-12 to address whether individuals are eligible for health savings account (HSA) contributions if they are covered under health plans that provide benefits for male sterilization or male contraceptives without a deductible. At least four states—Illinois, Maryland, Oregon and Vermont—have laws requiring health insurance policies to cover these benefits without a deductible.

According to the IRS, because these benefits are not for preventive care, individuals who are covered under these health plans are ineligible for HSA contributions. However, the IRS provided transition relief for periods before 2020. During this time, individuals will not be ineligible for HSA contributions merely because their health plan covers male sterilization or male contraceptives without a deductible.

State insurance laws may require health insurance policies to provide certain health care benefits without a deductible or subject to a deductible that is lower than the HDHP-required minimum deductible. State law may even characterize the benefits as preventive care. However, for HSA purposes, only the IRS determines whether a type of benefit qualifies as preventive care. If a health plan covers a non-preventive care service before the deductible is satisfied, it will not qualify as an HDHP under the HSA rules.

The preventive care guidelines under the ACA include contraceptive methods, sterilization procedures and patient education for women. The guidelines, however, do not include benefits or services relating to a man’s reproductive capacity, such as sterilization or contraceptives.

Refer to the attached bulletin for additional information and contact your NEEBCo representative with questions.

IRS Addresses Impact of Male Sterilization Coverage on HSA Eligibility