On May 10, 2023, the Department of Commerce and Insurance issued Bulletin 2023-03 to remind Tennesseans of the potential effect of the state’s cost-sharing requirements on HSA eligibility.
Tennessee requires insurers to apply all cost-sharing amounts toward the enrollee’s contribution to any applicable cost-sharing requirements regardless of whether they are paid by an enrollee or on behalf of the enrollee by another person. The bulletin summarizes IRS guidance which provides that an HDHP-covered individual who also has a discount card for healthcare services or products may still contribute to an HSA, provided that the individual is required to pay the costs of the covered healthcare until the minimum annual deductible for the HDHP is satisfied. Further, it cautions Tennesseans covered by HDHPs to carefully apply cost-sharing amounts toward their annual deductible to preserve HSA eligibility.
The bulletin concludes by encouraging employers and insurance issuers offering HDHPs to notify employees and insureds of these circumstances.