CARES Act changes to FSA’s and HSA, HRA’s and FSA’s

Posted by Andrew Kaiser on April 6, 2020

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) contains important provisions that will affect HSAs, HRAs and FSAs.

Prior to the enactment of the Affordable Care Act (“ACA”), over-the-counter medicine and drugs were eligible for reimbursement under health FSAs, HSAs and HRAs without qualification. However, ACA mandated that such items (i.e., cold medicine and aspirin) were no longer eligible for reimbursement without a prescription from a doctor. Under the CARES Act, approved March 27, 2020, this restriction has been renounced entirely. Therefore, allowing reimbursement of over-the-counter medications without a prescription to the extent such items were purchased on January 1, 2020 and thereafter. Additionally, the CARES Act now allows for the reimbursement of menstrual care products by health FSAs, HSAs and HRAs.

Effective for purchases on or after January 1, 2020

  • HSA-qualified health plans can now cover telehealth and other remote care service expenses below the HDHP statutory deductible limit, or at no or low-cost sharing, without affecting an account holder’s ability to continue contributing to their HSA. This provision will last until December 31, 2021.
  • Over-the-counter drugs and medicines can be paid for or reimbursed through an FSA, HRA or HSA without a doctor’s prescription.
  • Menstrual care products are now considered a qualified medical expense and are eligible for payment or reimbursement through an FSA, HRA or HSA. All expenses incurred after December 31, 2019 qualify, and the provision has no expiration date.

However, be prepared, we have experienced that merchants (e.g. Walgreens, CVS, and smaller drug and grocery stores) are not in a position yet to support these transactions and are currently updating their systems to do so. Accordingly, participants in HSA’s and FSA’s will probably not be able to use their debit cards for these transactions until the systems have been updated.

It is reported that merchants will be prepared to accept benefit card transactions for over-the-counter items around April 15, 2020 and menstrual care products around May 15, 2020. Manual claims can be filed for reimbursement in the interim.

Please let us know if we can help you.

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