The IRS is clearing up tax rules for certain health plans when it comes to coronavirus testing.
Some good news from the Internal Revenue Service.
Until further notice is given, health insurers’ high-deductible plans may foot the bill on novel coronavirus-testing and treatment before their customers reach their steep deductible, the IRS said Wednesday. The IRS said these health-insurance plans — which have less expensive monthly premiums than traditional health-insurance plans — will not lose their tax status if they pay for COVID-19 care before they would typically start paying for medical services.
Approximately 50 million people use these types of health-insurance plans, according to the Employee Benefit Research Institute, a think tank focused on health, savings and retirement benefits. These plans have lower monthly premiums than traditional plans, but users have to spend more money before the insurance plan starts covering the bill.
Any plan with an individual deductible of at least $1,400 or $2,800 for a family qualifies as a high deductible plan, according to the IRS. People using high-deductible plan can use pretax income to pay for their care in health-savings accounts, the IRS said. The 2020 contribution limits are $3,550 for individuals and $7,100 for families.
The IRS announcement came the same day the World Health Organization said the coronavirus outbreak was formally a “pandemic” now that human-to-human transmission of the virus occurred on several continents. Worldwide, there were 121,977 COVID-19 cases and 4,386 deaths as of Wednesday afternoon; about 66,702 people have recovered.
The health plans already pay for certain preventative care before users reach their deductible, such as physicals and cancer screening. The IRS announcement adds coronavirus testing and care to the list. The U.S. had 1,101 cases of the coronavirus, and 31 deaths, and has spread to over 100 countries in just over three months.
The IRS said it was trying to clear any “potential administrative and financial barriers” so health plans could address “the unprecedented public health emergency posed by COVID-19.” Treasury Department officials are also reportedly considering pushing back the April 15 income tax filing deadline, according to the Wall Street Journal. No final decision has been made, the outlet said.