In the context of medical coverage, the terms “Preventive Services” and “Preventive Care” are often used interchangeably. The two terms, however, have very different meanings. Understanding the difference can have significant implications for plan sponsors and participants alike.
For example, we recently fielded a question from a client who had moved to a new health insurance carrier/third party administrator (TPA) regarding preventive breast ultrasounds. The client soon learned that the new TPA, unlike its prior TPA, refused to provide this coverage at no cost, even though the plan was fully insured and coverage of breast ultrasounds was a state insurance mandate. The client was adamant that the Affordable Care Act (ACA) required this preventive coverage at no cost, as did state law. The TPA was equally adamant that the ACA did not require no cost coverage of preventive breast ultrasounds. Furthermore, the TPA asserted that, because the client offered a High Deductible Health Plan (HDHP) coupled with a Health Savings Account (HSA), covering breast ultrasounds with no cost sharing would constitute disqualifying other health coverage,[1] thereby jeopardizing the tax-qualified status of the HDHP/HSA arrangement. The TPA maintained that despite a state insurance mandate for preventive breast ultrasounds, protecting the tax-qualified status of the HDHP/HSA trumped state law.
We quickly realized that both parties were right—and wrong—and that the genesis of at least part of the disagreement was the conflation of the terms “Preventive Services” and “Preventive Care.”
Preventive Services
The ACA introduced the concept of no cost Preventive Services when it was signed into law on March 23, 2010. Specifically, the ACA provides that group health plans had to begin covering in-network Preventive Services at no cost to participants by September 23, 2010. “Preventive Services” are defined as a list of services recommended by the U.S. Preventive Services Task Force (USPSTF), the Health Resources and Services Administration (HRSA), and the Advisory Committee on Immunization Practices (ACIP). The list of Preventive Services ranges from immunizations to cancer screenings to reproductive health care. Since 2010, the list of Preventive Services has been changed, expanded, and challenged,[2] but as of this writing, the ACA’s Preventive Services list and mandate remain intact.
Preventive Care
The concept of Preventive Care is relevant in the context of HDHPs[3] coupled with HSAs[4]. Preventive Care refers to those services that can be covered at no cost or reduced cost by HDHPs without constituting disqualifying other health coverage that would prohibit a participant (or their employer) from contributing to an HSA. The list of Preventive Care is found in a series of IRS Notices[5] dating back to 2004 and is more extensive than the ACA’s list of Preventive Services. Unlike Preventive Services, there is no federal mandate that group health plans, even HDHPs, cover every item or service identified as Preventive Care. The IRS guidance simply provides that if an item or service of Preventive Care is covered at no cost by an HDHP, a participant (or their employer) can still make tax-favored contributions to an HSA. It is important to note, however, that fully insured group health plans may be subject to state insurance mandates requiring coverage of services on the Preventive Care list. This is because insurance carriers are required by law to adhere to the insurance mandates of the state in which the insurance policy is issued.
Where the Confusion Arises
As stated at the outset, the terms Preventive Services and Preventive Care are often used interchangeably, giving rise to confusion and misunderstanding. Returning to our example, it quickly became apparent that the client incorrectly believed that breast ultrasounds were an ACA-mandated Preventive Service. In fact, while the list of Preventive Services includes mammograms, the USPSTF currently does not recommend “screening for breast cancer with breast ultrasound or MRI, regardless of breast density,”[6] reasoning that there is inadequate evidence on the benefits of such screening. The TPA, therefore, was correct that the ACA does not mandate coverage of preventive breast ultrasounds as a Preventive Service.
However, it appears the TPA next incorrectly concluded that, because breast ultrasounds are not an ACA Preventive Service, neither are they Preventive Care for purposes of the HDHP/HSA requirements. Whether the TPA jumped to this conclusion because it did not recognize the difference between Preventive Services and Preventive Care, because it did not know that the USPSTF was not the controlling authority for determining the approved list of Preventive Care, or for some other reason remains unclear; but the fact is that the IRS’s original, 2004 guidance about HDHPs (Notice 2004-23) includes breast cancer screening on its list of Preventive Care services. While Notice 2004-23 used mammography as an example for breast cancer screening, it did not exclude other forms of screening for breast cancer. To further clarify this point of coverage, in October of 2024, the IRS published Notice 2024-75, which explicitly provides: “breast cancer screening may include imaging other than mammograms,” and requires that “the reference in Notice 2004-23 to breast cancer screening . . . be changed to ‘Breast Cancer (e.g., Mammograms, Magnetic Resonance Imaging (MRIs), Ultrasounds, and similar breast cancer screening services).’ This language change is effective as of the date of publication of Notice 2004-23 (April 12, 2004).”
In the end, because the plan was fully insured, it was required to comply with the state insurance mandate, and in connection with this, the TPA was persuaded that such compliance was supported by the IRS’s Preventive Care guidance and therefore would not jeopardize the tax-qualified status of the HDHP/HSA arrangement. The client was pleased with the outcome for its plan participants, and all parties involved gained a new appreciation for the importance of recognizing and thoroughly understanding the difference between Preventive Services and Preventive Care.
