IRS Releases Updated Publication 969: Health Savings Accounts and Other Tax-Favored Health Plans

The IRS recently released the updated Publication 969: Health Savings Accounts and Other Tax-Favored Health Plans for use in preparing 2023 tax returns. This publication provides information about consumer-directed healthcare vehicles such as Health Savings Accounts (HSAs), Medical Savings Accounts (MSAs), Flexible Spending Arrangements (FSAs) and Health Reimbursement Arrangements (HRAs).

The update includes reminders on important guidance and other provisions for these plans, including:

Sunsetting of COVID-19 relief for HDHPs. In accordance with the COVID-19 public health emergency, the IRS released Notice 2020-15, which allowed HDHPs to provide COVID-19 testing and other treatment benefits without a deductible or below the applicable HDHP minimum deductible without jeopardizing HSA eligibility. After the announced end of the COVID-19 emergency in May of 2023, the IRS released Notice 2023-37, which made the 2020 relief applicable only for plan years ending on or before December 31, 2024. Additionally, Notice 2023-37 clarified that COVID-19 testing would be treated as preventive care under HSA eligibility rules where the testing was designated with an “A” or “B” rating by the United States Preventive Services Task Force.

Telehealth and other remote care service provisions. HDHPs may have a $0 deductible for telehealth and other remote care services for plan years beginning before 2022, months beginning after March 2022 and before 2023, and plan years beginning after 2022 and before 2025. Also, an “eligible individual” remains eligible to make contributions to their Health Savings Account (HSA) even if the individual has coverage outside of the HDHP during these periods for telehealth and other remote care services.

Surprise billing for emergency services or air ambulance services. For plan years beginning after 2021, HDHPs may provide benefits under federal and state anti-“surprise billing” laws with a $0 deductible without affecting HSA eligibility. Also, an HSA-eligible individual will remain HSA-eligible even if the individual receives anti-"surprise billing” benefits outside of the HDHP.

Insulin products. For plan years beginning after 2022, HDHPs may have a $0 deductible for selected insulin products without affecting HSA eligibility.

COVID-19 home testing and personal protective equipment (PPE). The cost of home testing for COVID-19 and the costs of PPE, such as masks, hand sanitizer and sanitizing wipes, for the primary purpose of preventing the spread of COVID-19 are eligible medical expenses that can be paid or reimbursed under health FSAs, HSAs, HRAs and MSAs.

Over-the-counter (OTC) medicine. OTC medicine (whether or not prescribed) and menstrual care products are treated as medical care for amounts paid after 2019 and, as such, are eligible expenses for FSAs, HSAs, HRAs, and MSAs.

2023 Publication 969 »