Employees with chronic conditions now will have an easier time using their health savings accounts to pay for their medication, new government guidance said this week, marking a growing movement toward modernizing the popular accounts.
The IRS and Treasury Department determined chronically ill patients enrolled in HSA-eligible high-deductible health plans will be able to access coverage for certain services before they spend enough money out of pocket to meet the high deductible — good news for employers and employees who struggle with the cost of treating chronic conditions, including heart disease, diabetes, asthma and depression. Previously, workers enrolled in the plans had to pay down their deductibles before their insurance covered such treatment.
“Pre-existing, chronic conditions are debilitating for millions of Americans,” says Jim Klein, president of the American Benefits Council, one of the industry groups that had been advocating for the change to HSAs. “These conditions represent an enormous drain on the economy through high health costs and reduced employee productivity. Modernizing HSAs to address chronic disease prevention is important to help tackle this problem.”
Research from the Centers for Disease Control and Prevention shows that full-time workers with chronic diseases cost employers $153 billion in lost productivity each year.
The guidance reclassifies certain medical services as preventive for someone with a chronic condition. Those medical services include beta blockers for heart failure, inhalers for asthma, insulin and glucometers for diabetes, and statins for heart disease.
The change is expected to help encourage patients get care and to help save employers and insurers money in the process because chronic conditions often worsen without regular care and medication.
“Failure to address these chronic conditions has been demonstrated to lead to consequences, such as amputation, blindness, heart attacks and strokes, that require considerably more extensive medical intervention,” according to the guidance.
The news comes as HSAs are growing. More than 20 million people are now using the accounts, according to America’s Health Insurance Plans.
And last month, President Trump directed the Treasury Department to find ways to expand the use of HSAs paired with high-deductible health plans to pay for “medical care that helps maintain health status for individuals with chronic conditions.”
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