Ounce by ounce, more Americans are embracing preventative care measures

The list of IRS-qualified medical expenses for preventive care continues to expand.

Instead of using tax-advantaged accounts only when sickness strikes, people can utilize these benefits before illness hits.

An ounce of prevention is worth a pound of cure. When it comes to preventative health care, more Americans are taking that old adage to heart, especially with COVID-19 still swirling around us.

Through telemedicine, mobile devices, remote monitoring, at-home tests and data sharing, more people are becoming active and engaged with their health care, including practicing healthy behaviors and prevention. According to a recent Deloitte survey, 42% of US consumers said they used tools to measure fitness and track health-improvement goals. Also, a majority of consumers (80%) who have had a virtual-care visit would choose to have another.

As an organization that has long advocated for health care consumerism, including health savings accounts (HSAs), flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs), we at ECFC are encouraged by these proactive trends and the focus on preventative health care measures. Recently, the push toward prevention received a significant boost when the IRS announced that facemasks, hand sanitizers, sanitary wipes and other PPE are payable under HSAs, FSAs and HRAs. Since the pandemic hit, we have been at the forefront advocating on this important issue, and the IRS ruling adds another critical layer of protection against the spread of COVID-19. It is a big win for everyone.

With interest in preventative care increasing, the recent IRS announcement also provides a precedent in continuing to invest in preventative health care measures like PPE. Instead of using tax-advantaged accounts only when sickness strikes, people can utilize these benefits before illness hits. This prevention mindset started prior to COVID-19 with IRS Notice 2019-45, which expanded the list of preventative care benefits that high-deductible health plans (HDHPs) coupled with HSAs can cover before enrollees have met their deductibles. The notice ruled that HDHPs can provide pre-deductible coverage for certain items and services to manage chronic conditions without jeopardizing a participant’s HSA eligibility.

Under this guidance, the Treasury Department and IRS, in consultation with the U.S. Department of Health and Human Services, determined that certain medical care services received and items purchased, including prescriptions drugs for certain chronic conditions, should be classified as preventative care for people with those chronic conditions. Those conditions include congestive heart failure, hypertension, asthma, diabetes and depression. All in all, the IRS added 14 items and services for a range of chronic conditions to the preventative care benefits that may be covered.

With the pandemic enveloping the United States last spring, our industry made an increased commitment to help Americans take even greater control of their health care. It paid off. The IRS announced that HDHPs could pay for COVID-19 tests and treatment without jeopardizing their status. It also meant that a person with an HDHP that covers those costs could continue to contribute to an HSA. In addition, the CARES Act expanded eligible items that anyone could purchase with HSAs, FSAs or HRAs. Americans also received a preventative boost when it was ruled that HDHPs with an HSA can provide pre-deductible coverage for telehealth services though 2021.

Tax-advantaged accounts like HSAs, FSAs and HRAs have always provided people with plenty of economic benefits, but until recently the valuable preventative health components could be overlooked or were not well supported or convenient for coverage or reimbursement.

Now the list keeps growing, and both common and longtime IRS-qualified medical expenses that aid in prevention include:

There’s no doubt the pandemic has challenged everyone’s sense of well-being and turned the health care system upside down. The good news is that more people are playing a smart prevention defense to protect their health. And little by little, the health care system is helping people to take charge of their health more than ever before.

Thanks to this take charge spirit augmented by technology, the IRS ruling on PPE and the agency’s ongoing evolution regarding prevention coverage, Americans now have additional opportunities to manage and take ownership over their health care with more preventative measures and safeguards. And today more than ever, an ounce of prevention is truly worth a pound of cure.

Christa Day is executive director at ECFC, a non-profit organization dedicated to maintaining and expanding employee benefit programs on a tax-advantaged basis.

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