The IRS has released Rev. Proc. 2024-75, which affects the tax-favored status of HSAs. Under federal law, an individual may only participate in an HSA if their health insurance plan is considered a High Deductible Health Plan (HDHP) and the participant has no other “disqualifying” health insurance. HDHPs usually have a higher-than-average deductible that a participant must satisfy before they can begin receiving benefits. Exceptions are classified as “preventive care benefits” and may be covered by an HDHP without a deductible being met.

Rev. Proc. 2024-75 adds several new exceptions to the traditional HSA deductible rule:

- Over-the-counter oral contraceptives (such as birth control pills) regardless of prescription;

- Male condoms, regardless of prescriptions and regardless of the gender of the purchaser;

- Breast Cancer Screenings, including:

- Mammograms;

- MRIs;

- Ultrasounds;

- Other Breast Cancer Screening Services.

- Continuous Glucose Monitors (if measuring glucose levels using a similar detection method to other glucometers) that do not serve any supplemental, non-preventive care functions;

- Selected insulin products as described in 223(c)(2)(G) of the Code, regardless of whether it is being used to treat diabetes or prevent the exacerbation of diabetes.

Plan administrators should ensure that they understand the new HDHP rules and especially the nuances surrounding what type of glucose monitor is considered an HSA-eligible expense versus what type is not.

You can read the entire IRS Document HERE.