In 2016, Maryland passed a Contraceptive Equity Act requiring commercial health insurance plans to provide coverage for male sterilization service without a co-payment, co-insurance or deductible.
- Effective 1/1/18, the Act mandates that male contraceptive and sterilization services (vasectomies) must be covered as a preventive service – i.e., without any deductible or cost-sharing required.
- In accordance with this mandate, Carefirst, UnitedHealthcare and other Health Insurance Carriers will provide coverage for male sterilization service without a co-payment, co-insurance, or deductible beginning 1/1/18 in Maryland.
- If the IRS determines after 1/1/18 that male sterilization is a preventive service AND that position is treated retroactively, no further legislative action will be needed. However, if no such determination is made, new Maryland legislation would be required to preserve HSA contributions in Maryland.
Emergency legislation is expected to be introduced in the upcoming General Assembly session, which convenes on Jan. 10. If this legislation is passed in the 2018 session, there is still a strong possibility it will NOT be retroactive to 1/1/18.
Therefore legally, until a fix is made, CPA’s are advising their clients that HDHPs do not exist in Maryland as of 1/1/18 and that HSA contributions made before the issue is resolved are in danger of being disallowed and potentially subject to penalty.
As a Reminder
HSA-qualified high deductible health insurance plans (HDHPs) are prohibited from covering any benefits before the deductible is met, except for IRS-approved preventive care services.
- If the IRS does not consider male sterilization to be a preventive care service and your employees fund a non-HSA qualified HDHP, they may be subject to tax penalties.
- Employees should contact their tax or other appropriate professional if they have questions.
- Members can continue to use their previously-funded HSA account to pay for health care services.
Should you have any questions, please reach out to your FosterThomas benefits account manager or customer service representative.
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