Earlier this year, there were major concerns that the new Maryland Contraceptive Equity Act that went into effect on January 1, 2018 mandated that insurers would cover vasectomies at no cost to their members and that this would jeopardize the ability of members to use their health savings accounts (HSAs).

    The rationale was that IRS rules do not include vasectomies among preventive services for high-deductible health plans (HDHPs); therefore, individuals with HSAs connected to those plans could no longer contribute to them since those plans no longer met IRS standards. In response to the concern about tax penalties, the IRS has provided transitional relief until 2020 to those with plans treating male sterilization procedures as a preventive benefit. Marylanders will still be able to fund their HSAs and their plans will still be treated as qualified HDHPs.

    The transitional relief period was designed to allow states to amend their laws in order to be consistent with definitions of preventive services by the IRS and the Treasury Department. As a result, Maryland lawmakers introduced legislation that would exempt high-deductible plans from the state mandate to cover vasectomies before the deductible is met. The Governor approved this legislation on April 10, 2018, thereby preserving HSA eligibility beyond the transitional relief period.