Employers may consider establishing on-site health clinics in order to help manage health care costs and encourage employee wellness. Onsite health clinics can be designed to cover a wide array of health care services, such as first aid, treatment of work-related injuries or illnesses, preventive care or primary care. Employers that offer high deductible health plans (HDHPs) that are compatible with health savings accounts (HSAs) should consider how access to an on-site health clinic may impact employees? HSA eligibility. According to Internal Revenue Service (IRS) guidance, having access to an on-site health clinic that provides significant medical benefits for free or at a reduced cost is not compliant until an employee has paid the full annual deductible. Employers that want to establish an on-site health clinic while preserving HSA eligibility will need to make sure that the clinic?s services are provided in a way that is HSA-compatible. This may include, for example, limiting the clinic?s services to first aid, care for workplace illnesses or injuries, or preventive care.
While generally first aid alone would not be cost effective justification for a full service health clinic, combining care for work related illness/injuries and preventative care often can be well justified. For work related injuries or illnesses, even one claim that is well managed internally can justify the cost of a health center as compared to a claim being managed externally in a health care system that is highly incentivized to generate costs and never achieve closure to a work related claim. In the remainder of this article, I intend to discuss further the preventative care safe harbor.
*As always, this is solely for discussion purposes and is not intended as legal advise. As always, consult with your legal professionals.*
To start, we know that to be HSA-eligible, an individual must: · Be covered by an HDHP · Not be covered by other health plan coverage that is not an HDHP (with certain exceptions) · Not be enrolled in Medicare and · Not be eligible to be claimed as a dependent on another person?s tax return. A company should NOT provide health plan coverage (ie traditionally provided medical care) within an onsite/near site employer supported health center to employees with high deductible plans because of the regulations surrounding such plans. However, it is important to recognize that preventative care services are allowed without violating HDHP rules.
When we look at the preventative care safe harbor for providing on site/near site services to employees with a high deductible health plan, we must focus on the definition of preventative care. To be a preventive care benefit, the benefit must either be described as preventive care in Section 1861 of the Social Security Act or be determined to be preventive care in guidance issued by the Department of the Treasury and the IRS.
The Social Security Act has an extensive list of allowed preventative care services including USPTF grade A/B recommendations (a part of our CareStream HRA started in 2022). Yet, the most relevant portion of the Act for this discussion however revolves around the Annual Wellness Visit and personalized plan. For purposes of SSA definition, (https://www.ssa.gov/OP_Home/ssact/title18/1861.htm)
The term ?preventive services? means the following:
(A) The screening and preventive services described in subsection (ww)(2) (other than the service described in subparagraph (M) of such subsection).
(B) An initial preventive physical examination (as defined in subsection (ww)).
(C) Personalized prevention plan services (as defined in subsection (hhh)(1)).
The Annual Wellness Visit is considered a preventative service under screening safe harbor and also under the safe harbor is what is called ?personalized prevention plan services? as noted above. When looking further at what a personalized prevention plan includes within the Social Security Act, one finds the following services are allowed under the preventative care safe harbor:
(F) The furnishing of personalized health advice and a referral, as appropriate, to health education or preventive counseling services or programs aimed at reducing identified risk factors and improving self-management
In summary, an employer supported health center must be aware that employees with a high deductible health plan can NOT enjoy free or reduced cost health services while still being compliant with IRS regulations. It is impractical to track and provide these free or reduced cost benefits to only employees that have met the full deductible for the current year, hence the most practical solution for near site/onsite employer health centers is to provide services which are compliant and within a safe harbor at all times for all employees. Besides first aid and management of occupational conditions, an annual wellness visit allows for personalized health advise and referrals to be made within the preventative care safe harbor. These referrals should reduce health risks and thus be preventative. The referrals or programs should improve self management so that employees do not need to utilize additional resources beyond the preventative health programs the employer has established. If you need assistance in creating such plans or offering a quality annual wellness visit, please feel free to contact us to discuss!
Portions of this article were cited from a benefits expert company and those citations as well as additional details care be found here: https://www.sullivan-benefits.com/wp-content/uploads/On-site-Health-Clinics-Impact-on-HSA-Eligibility-08.23.17.pdf