Topic: COVID-19 PPE is now HSA, FSA eligible
Face masks, hand sanitizer and other personal protective equipment used to prevent COVID-19 spread can be treated as medical expenses.
Employers have welcome benefits guidance to share with employees: Workers can now use their health savings account, flexible spending account or health reimbursement arrangement for face masks and other personal protective equipment used to prevent COVID-19.
PPE used for “the primary purpose of preventing the spread of COVID-19”—including face masks, hand sanitizer, gloves and sanitizing wipes—can be treated as medical expenses, the IRS quietly announced last week.
The new amendment from the agency also allows FSA and HSA providers to retroactively allow any claims for COVID-19 protective gear purchased after January 2020 and through the end of December 2022 to be paid out or reimbursed. However, an FSA user can only be reimbursed for spending that occurred during the current plan year unless their employer took advantage of a temporary FSA grace period extension through the Consolidated Appropriations Act of 2021. There is more flexibility for HSA holders, though; as long as the PPE purchases were made after the account was created, account holders can reimburse themselves at any time.
Although the move comes a year into the pandemic, advocates have been calling for the change for some time. In October, the U.S. House of Representatives introduced H.R. 8450, sponsored by Rep. John Curtis (R-Utah), which would have allowed for PPE to be FSA/HSA eligible until the end of the year in which the current state of emergency ends. That bill did not pass. In February, Curtis, with Reps. Ami Bera, M.D. (D-Calif.), and Jeff Van Drew (R-N.J.), introduced the Protecting Individuals and Families Act (H.R. 373), which featured similar provisions to those introduced in Announcement 2021-7.
The change is welcome news for employees and employers, says Rachel Rouleau, vice president of compliance at Health-E Commerce, parent brand of FSAstore.com and HSAstore.com.
“Providing greater access to masks, hand sanitizers and sanitizing wipes that help prevent the spread of COVID-19 will also help to create a safer workplace as employees begin to return to the office,” she says. Employers and HR leaders should “work with their benefits administrators to educate employees about this change, as the newly eligible products will help individuals further maximize their FSA and HSA contributions,” she adds.
Topic Discussed: COVID-19 PPE is now HSA, FSA eligible