14 Apr 2020 CARES Act: Changes to Health Savings Accounts
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law March 27, 2020, contains important updates on the use of health savings accounts (HSAs), flexible spending accounts (FSAs) and health reimbursement accounts (HRAs).
Here are the changes that expand qualified medical expenses and access to remote care:
• High-deductible health plans (HDHPs) with an HSA may provide pre-deductible coverage for telehealth and other remote care services. This provision will last until December 31, 2021 (plan year must begin prior to this date).
Certain over-the-counter drugs and menstrual care products are now qualified medical expenses:
• The CARES Act restores the ability to use HSAs, FSAs and HRAs to purchase certain OTC drugs and medications, like aspirin and other pain medications, allergy medication, etc., without a doctor’s prescription.
• For the first time, menstrual care products are considered qualified medical expenses for payment or reimbursement with an HSA, FSA or HRA.
• Both provisions for OTC and menstrual products apply to amounts paid or expenses incurred on or after January 1, 2020 and are ongoing without an expiration date.
Important note for FSAs and HRAs:
You can use your account funds to purchase these products immediately. However, you may attempt to purchase OTC drugs and medications or menstrual care products with your Plan Credit or Debit Card and be unable to do so. This is because individual merchants, like pharmacies and convenience stores, must update their point of sale (POS) system to now recognize these products as qualified medical expenses for FSA and HRA.
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