Male Sterilization Coverage Under HDHPs

On April 10, 2018, Gov. Hogan signed SB 137 into law and it became effective upon signing. The new bill permits high deductible health plans (HDHPs) issued in Maryland to apply male sterilization expenses to the deductible. As background, effective Jan. 1, 2018, all policies issued in MD had to provide coverage for male sterilization without applying the cost to the deductible. However, this caused a problem for the HDHPs as the IRS clarified in March, 2018, through IRS Notice 2018-12: male sterilization didn’t fall under the preventative care category and such coverage would have to be subject to a deductible or the HDHP would fail to be HSA qualified.

There is transition relief in place until Dec. 31, 2019 that permits HSA eligible individuals to have coverage under an HDHP that applies no cost sharing to male sterilization. The relief simply stated it applied to periods prior to 2020. This seems to indicate that the relief applies on a tax year basis and not on a plan year basis. Thus, some carriers are starting to apply male sterilization to the deductible for policy years beginning on or after Jan. 1, 2019. This is so that the HDHP may maintain its qualified status for the months of the policy year that run into 2020 (for example, a policy year that begins Feb. 1, 2019 and ends Jan. 31, 2020).

Importantly, SB 137 includes a provision that if the IRS includes male sterilization as a preventive care expense in the future, then the SB 137 amendment permitting HDHPs to apply male sterilization to the deductible would automatically be void.

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