In 2016, Maryland passed the Contraceptive Equity Act, which requires health care insurers to:
• Provide coverage for a single dispensing of up to a six-month supply for covered, FDA- approved, prescription
contraceptives and devices (after a two-month trial).
• Provide coverage for over-the-counter emergency contraceptives without a prescription
• Expand access to male sterilization benefits with no out-of-pocket costs.
The IRS requires that high deductible health plans (HDHP) not cover benefits until the deductible for that year is
satisfied. As you know, under current IRS rules for HDHPs, only preventive care benefits can be provided without a
deductible. Preventive care includes a variety of screenings and services for adults and children. Food and Drug
Administration-approved contraceptive methods, sterilization procedures, and patient education and counseling, as
prescribed by a health care provider for women with reproductive capacity also must be covered without a copayment
or coinsurance before the deductible is met. Male sterilization is not included in the IRS’ list of preventive services.
The new Maryland law, effective January 1, 2018, creates a conflict with the IRS rules regarding the treatment of male
sterilization as a preventive service. This new law impacts HSA plans sold in Maryland. Members who fund HSA's may be subject to tax penalties when they file their 2018 taxes – regardless of whether they use the covered benefit
(male sterilization) or not. Subscribers and members with Grandfathered plans are not impacted.
The Maryland Insurance Administration is aware of this issue and has asked the IRS for clarification as to whether or
not they consider male sterilization to be a preventive benefit for the purposes of IRS regulatory guidance. In the
meantime, members who fund an HSA with these plans may be subject to tax penalties if the IRS does not recognize
male sterilization as a preventive care benefit.
Members can continue to use their previously-funded HSA account to pay for health care services and should consult
with a tax professional if they have further questions.
Excerpt from Carefirst Blue Cross Bliue Shield of Maryland, 12-5-2017
