• All
• Carrier News
• COVID-19
• Healthcare Reform
• Industry News

CARES Act HSA, FSA, and HRA Changes

Jul 7, 2020, 4 Minute Read

Help your clients and their employees understand the CARES Act changes to Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs), and Health Reimbursement Arrangements (HRAs) with this recap from Sterling Administration.

CARES Act and HSAs

What is the HSA Contribution Deadline?
The IRS has confirmed that account holders can make contributions to HSAs for the 2019 plan year up to the new filing deadline of July 15, 2020. The IRS states that contributions to an HSA may be made at any time during the year or by the due date for filing that year’s tax returns. This rule applies to the new federal income tax filing deadline for 2020, which the IRS extended in response to the COVID-19 crisis.

Does my HSA Cover COVID-19 Testing and Treatment?
The IRS (Notice 2020-15 on March 11, 2020) allows high-deductible health plans (HDHPs) to cover testing and treatment for COVID-19 without a deductible. Coronavirus testing and treatment are considered qualified medical expenses under an HDHP, and people can use HSA funds to pay for it. Due to the COVID-19 national health emergency, Notice 2020-15 also applies to HDHPs that would otherwise be disqualified under Internal Revenue Code section 223(c)(2)(A). In other words, HDHPs that provide additional health benefits covering Coronavirus testing and treatment, and HDHPs with a deductible that falls below the minimum requirement are also subject to the Notice.

Does the CARES Act Expand the List of Reimbursable Expenses through an HSA? (Over-the-Counter (OTC) Drugs and Menstrual Care Products)
Yes. The CARES Act states that consumers can purchase OTC drugs and medicines (including menstrual products) with funds from an HSA, FSA, or HRA. Consumers may also receive reimbursement for OTC purchases through those accounts. This provision is effective for purchases and reimbursements of expenses incurred after December 31, 2019. No expiration date.

• Merchants were expected to start adopting changes for OTC items around April 15 and menstrual care products around May 15. However, merchants may take up to a month to complete the changes that will allow consumers to purchase these items with a card swipe.
• If consumers try to purchase these items with their benefits card before systems have been updated and the transaction is denied, they can submit a claim for reimbursement.

What Has Changed Regarding Telehealth?
The CARES Act states that “telehealth and other remote care services” below the deductible will be permitted in an HSA-compatible HDHP. This provision is effective immediately and will expire on December 31, 2021.

CARES Act and FSAs

Does the CARES Act Expand the List of Reimbursable Expenses through an FSA? (Over-the-Counter (OTC) Drugs and Menstrual Care Products)
Yes. The CARES Act states that consumers can purchase OTC drugs and medicines (including menstrual products) with funds from their HSA, FSA, or HRA. Consumers may also receive reimbursement for OTC purchases through those accounts. This provision is effective for purchases and reimbursements of expenses incurred after December 31, 2019. No expiration date.

• Merchants were expected to begin adopting changes for OTC items around April 15 and menstrual care products around May 15. However, merchants may take up to a month to complete the changes that will allow consumers to purchase these items with a card swipe.
• If consumers try to purchase these items with their benefits card before merchants have updated their systems and reject the transaction, they can submit a claim for reimbursement

Can Dependent Care FSA Participants Who Have Lost Preschool and Childcare Services Due to Facility Closures Reduce Their DCA Elections or Terminate Altogether?
Yes. Participants can reduce or terminate their dependent care account elections under these circumstances, as their childcare needs have changed. However, account holders are advised to keep in mind that they may not need to change or revoke their plan elections, even if they are not incurring any new dependent care expenses. Account-holders may be able to claim their full plan year elections once the shelter-in-place orders cease, as childcare expenses can often reach the $5,000 annual contribution limit within 2-5 months.

CARES Act and HRAs

Does the CARES Act Expand the List of Reimbursable Expenses Through an HRA? (Over-the-Counter (OTC) Drugs and Menstrual Care Products)
Maybe. It depends on how the employer’s specific HRA is set up. Reimbursable expense rules under an HRA plan vary from employer to employer, so your HRA plan documents will need to be reviewed.

The CARES Act states that consumers can purchase OTC drugs and medicines (including menstrual products) with funds from their HSA, FSA, or HRA. Consumers may also receive reimbursement for OTC purchases through those accounts. This provision is effective for purchases and reimbursements of expenses incurred after December 31, 2019. No expiration date.

• Merchants were expected to begin adopting changes for OTC items around April 15 and menstrual care products around May 15. However, merchants may take up to a month to complete the changes that will allow consumers to purchase these items with a card swipe.
• If consumers try to purchase these items with their benefits card before systems have been updated and the transaction is denied, they can submit a claim for reimbursement.

FSA and HSA Store Eligible Items

Take the guesswork out of what is eligible with your FSA and HSA plans with Sterling Administration’s partner – the HSA Store and FSA Store. It’s an easy-to-use online shopping platform that offers 24/7 chat and online help.

• FSA eligible items.
• HSA eligible items.

Use these valuable coupons when shopping.

Questions?
Contact your Claremont team at 800.696.4543 or info@claremontcompanies.com.