Changes the CARES Act is Making to HSAs, FSAs, and HRAs
On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). This law brought a variety of relief measures aimed to aid in the fight against COVID-19. This communication will focus on the changes to Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs) and Health Reimbursement Arrangements (HRAs).
We encourage you to share the below information with those employees who may be impacted by this recent change.
HSAs for Telehealth
Generally, telehealth services are already considered an eligible expense for use with an HSA. However, telehealth expenses cannot be covered until an individual meets a minimum deductible.
The CARES Act now allows plans to pay for telehealth services before reaching the deductible, without impacting an individual's eligibility for an HSA. The telehealth services do not need to be related to COVID-19.
This is a temporary provision to encourage telehealth during the current emergency. This provision is set to expire on December 31, 2021.
Over-The-Counter (OTC) Items Without A Prescription
The Affordable Care Act (ACA) required that OTC drugs and medicine come with a prescription in order to be reimbursed under a HSA, FSA or HRA. The CARES Act has eliminated the prescription requirement in order to alleviate some burden on the healthcare system. Now, individuals enrolled in a HSA, FSA or HRA may seek reimbursement for OTC drugs and medicine without a prescription. The OTC medicines do not need to be related to COVID-19. Unlike the telehealth provision, this change is permanent.
Menstrual Products Now Identified as Eligible Items
The CARES Act has added menstrual care products as eligible expenses for use with an HSA, FSA or HRA. These products are defined as tampons, pads, liners, cups, sponges or similar products used by individuals with respect to menstruation. This change is permanent, and categorizes menstrual products as any other eligible expense.
Debit Card Point of Sale Issues
Individuals may encounter some logistical issues with using a benefits debit card for the newly eligible items. Some of the OTC / Menstrual items will be deemed as ineligible until merchants update their systems accordingly. This could mean that an item will be deemed eligible by one merchant and not another until all systems are updated. Administrators of HSA, FSA, HRA programs do not have control over the merchant side of coding the items. It is expected that the transfer may take an estimated 4-6 weeks. If an individual experiences an issue at point of sale with a debit card, they can still seek reimbursement after the point of sale by providing a receipt in accordance with the terms of their administrator.
FAQs Regarding HSA, FSA & HRA
We have compiled a list of commonly asked questions from members due to COVID-19. The link below will provide answers to the questions members are asking about their spending accounts.
We urge you to visit our website frequently as information is updated often.
As always, please feel free to reach out to your corporate benefits advisor or relationship manager with any questions or guidance regarding this update.
We hope you are and your families are well, safe & mindful.
Your Brooks Financial Team