The Impact of Expanding Pre-Deductible Coverage in HSA-Eligible Health Plans on Premiums

Research found that expanding pre-deductible coverage under employer-led health plans would add few costs to health insurance premiums, while lowering costs for patients.  



Paul Fronstin, PhD, Employee Benefit Research Institute, Christopher Roebuck, PhD, RxEconomics LLC, and A. Mark Fendrick, MD, University of Michigan 


Employee Benefit Research Institute Issue Brief

Under current law (IRS Notice 2019-45), Health Savings Account-eligible high deductible health plans offered by employers have the flexibility to cover 14 medications and other health services used to manage chronic conditions prior to meeting the plan deductible. These medications and services are aimed at treating diabetes, heart disease, asthma, depression and osteoporosis. 

The white paper builds on prior research indicating that many employers are already offering expanded pre-deductible coverage and would add more services on a pre-deductible basis if allowed by the IRS.

Key Findings:

  • The impact on premiums of expanding pre-deductible coverage for 14 services in HSA-eligible health plans as allowed in IRS Notice 2019-45 is small. Estimated premium increases range from virtually zero to 1.5 percent.
  • There is no expected premium increase when deductibles are replaced by coinsurance, use of health care services is assumed not to increase due to lower cost sharing, and enrollees’ related diagnoses are required.
  • We found a 0.9 percent increase in premiums when use of health care services was assumed to increase because of the lower cost sharing and when employers did not impose any cost sharing.
  • If all 14 services were excluded from pre-deductible coverage with no cost sharing, there was increased use of health care services, and the services were covered whether or not an enrollee had a related diagnosed condition, premiums would increase by 1.5 percent.