The United States Departments of Labor, Health and Human Services, and the Treasury recently released guidance clarifying that if an individual uses an HSA to purchase an OTC COVID-19 test and seeks the cost to be paid or reimbursed by their plan or issuer, the individual must repay that distribution back to their HSA or include the distribution in their gross taxable income.

As a reminder, the Oklahoma Insurance Department (the “Department”) previously released guidance on combining third-party payments, such as coupons or financial assistance, with health savings account (“HSA”) funds in LH Bulletin 2021-05. The Department also released guidance regarding the federal requirement for health insurance carriers to directly cover or reimburse the cost of over-the counter (“OTC”) COVID-19 tests in Special Notice of Coverage of OTC COVID Test.

As you may already know, prescription drug manufacturers and other institutions commonly provide prescription vouchers, coupons, or other financial assistance to reduce the out-of-pocket cost for consumers. While these third-party payments can help to ease the financial burden on consumers, they are not always included as part of a health plan enrollee’s total payment or towards the enrollee’s deductible or out-of-pocket maximum.

The Oklahoma Legislature recently enacted HB 2678, which requires health insurers to “include any amount paid by an enrollee or on behalf of an enrollee by another person when calculating the enrollee’s total contribution to an out-of-pocket maximum, deductible, copayment, coinsurance or other cost-sharing requirement.” When the enrollee of a high deductible health plan (“HDHP”) and associated health savings account (“HSA”) receives credit from third-party payments and/or financial assistance before meeting their annual deductible, the individual becomes ineligible to contribute to their HSA.

The state law enacted through HB 2678 requires all contributions, including out-of-pocket cost and third-party payments, to be calculated together as the enrollee’s total contribution, which conflicts with federal law prohibiting third-party payments from being combined with funds from an HSA before meeting the enrollee’s annual deductible in an HDHP.

The Oklahoma Insurance Department (“Department”) has issued guidance to health insurance companies, health maintenance organizations, insurance producers, and other interested parties through Bulletin Number LH 2021-05. The Department strongly encourages all Oklahomans enrolled in an HDHP paired with an HSA to contact their health insurer and/or health insurance agent to discuss the application of third-party funds when making payments for prescriptions.