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The federal agencies released several pieces of guidance over the last couple weeks, primarily focused on expanding and clarifying preventive coverage for HSA-eligibility and coverage with no cost-sharing as required under the Affordable Care Act (ACA). The various guidance is summarized below.
Expanded §213(d) Definition - Condoms
As set forth in IRS Notice 2024-71, amounts paid for condoms may now be treated as §213(d) qualifying medical expenses that are reimbursable on a tax-favored basis under a health FSA, HRA, or HSA.
IRS Notice 2024-75 IRS – HSAs & Preventive Coverage
IRS Notice 2024-75 expanded preventive care for HSA-eligibility to include (1) over-the-counter (OTC) oral contraceptives including, but not limited to, birth control pills and emergency contraception, regardless of whether they are purchased with a prescription and (2) male condoms, regardless of whether they are purchased with a prescription and regardless of the gender of the individual who purchases them.
In addition, the notice clarifies that the following are preventive care for HSA-eligibility:
- Breast cancer screenings, including mammograms, magnetic resonance imaging (MRIs), ultrasounds, and similar breast cancer screening services;
- Continuous glucose monitors measuring glucose levels and continuous glucose monitors that both monitor and provide insulin; and
- Any dosage form of any type of insulin, as well as any devices used to administer or deliver insulin.
Agency FAQs, Part 68 – Preventive Care Guidance
The agencies released informal guidance via FAQs, Part 68 that adds to the list of things that must be covered with no cost-sharing as preventive, explains a plan sponsor's responsibility for ensuring that preventive care is properly coded and covered, and also clarifies the reconstructive coverage that must be provided under the Women's Health & Cancer Rights Act (WHCRA).
Coverage of Pre-Exposure Prophylaxis (PrEP)
For plan years beginning on/after Sept. 1, 2024, non-grandfathered group health plans must provide coverage with no cost-sharing for three FDA-approved PrEP formulations, as well as specified baseline and monitoring, and are not permitted to use medical management techniques to direct individuals to utilize one PrEP formulation over another. This recommendation applies to sexually active individuals weighing at least 77 lb. who do not have but are at increased risk of HIV.
Coding and Coverage for Recommended Preventive Care
Medical items or services coded as preventive care in accordance with PHSA §2713 (or any item/service integral to the furnishing of that care), must be covered without cost-sharing by non-grandfathered group health plans, unless the plan sponsor has individualized information that establishes that the item/service was not preventive care. If a medical item/service is coded as preventive but the plan has information suggesting otherwise, the plan sponsor must ask the claimant and the provider for further information prior to imposing cost-sharing or denying the claim.
Many medical items/services could potentially be for preventive or non-preventive care, and there have been numerous complaints of full coverage not being made available for preventive care. To address this, the guidance recommends that plans regularly review the latest preventive care recommendations and published industry standards and then ensure they’re processing coverage for preventive care accordingly. In most cases, it will be carriers and TPAs that need to manage this on the plan’s behalf.
WHCRA Guidance
For any group health plan that provides coverage for mastectomies, the plan must also provide coverage for all stages of reconstruction of the breast on which the mastectomy was performed, reconstruction of the other breast to produce a symmetrical appearance, prostheses, and treatment of physical complications of the mastectomy. This coverage requirement includes chest wall reconstruction with aesthetic flat closure, if elected by the patient in consultation with the attending physician in connection with a mastectomy. This coverage requirement is not preventive and does not have to be provided with no cost-sharing, but should instead be covered subject to applicable plan cost-sharing (e.g., deductible and co-insurance).
Proposed Rules – Expanded Preventive Contraceptive Coverage for 2026
The agencies released a fact sheet and proposed guidance and that could go into effect for 2026 plan years if finalized. The proposed rules address expanded OTC contraceptive coverage and reasonable medical management techniques.
Expanded OTC Contraceptive Coverage
The proposed rules would require non-grandfathered group health plans to cover the following as preventive with no cost-sharing, unless there is a valid religious or moral objection to providing the coverage:
- Recommended OTC contraceptives without requiring a prescription; and
- Certain recommended contraceptive items that are drugs and drug-led combination products, unless at least one therapeutic equivalent of the drug or drug-led combination product (as defined by the FDA) is covered without cost sharing.
In addition, the proposed rules would require that all price comparison tools include a disclosure explaining that OTC contraceptive items are covered with no cost-sharing without requiring a prescription, along with a phone number and hyperlink to where more information is available about the plan's contraception coverage.
Reasonable Medical Management Techniques
The proposed rule restates previous FAQ guidance indicating that when reasonable medical management techniques are imposed for any preventive care, the plan must provide an easily accessible, transparent, and sufficiently expedient exceptions process that allows an individual to receive coverage without cost-sharing for the preventive service according to the frequency, method, treatment, or setting that is medically necessary for them, as determined by the individual’s provider, even if that service is not generally covered under the plan.
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