New Guidance on Qualifying Health Care Expenses
Recently the Internal Revenue Service (IRS) issued two notices of importance related to eligible health expenses.
Notice 2024-71 Condoms Are Considered Qualified Medical Expenses. In this Notice, the IRS established a safe harbor for expenses for the purchase of condoms to be treated as a qualified medical expense. As such, those expenses can be reimbursed by a health flexible spending arrangement, a health reimbursement arrangement, or a health savings account.
Notice 2024-75 Expanded List of Prevented Care Services for High Deductible Health Plans. To be eligible to contribute to a health savings account, an individual must be covered by a high-deductible health plan (HDHP). Generally, the HDHP may not provide coverage for health care below the statutorily determined high deductible amount; however, expenses paid for preventive care can be paid by the HDHP below the deductible. Notice 2024-75 expands the list of preventive care benefits that can be provided by a HDHP to include over-the-counter oral contraceptives and male condoms. The Notice clarifies when breast cancer screening, glucose monitors for individuals diagnosed with diabetes, and certain insulin products are treated as preventive care benefits.