The Coronavirus Aid, Relief and Economic Security Act (CARES Act), which was signed into law by President Trump on March 27, 2020, authorizes more than $2 trillion of economic relief for individuals, businesses and industries impacted by the COVID-19 pandemic.
Buried in the CARES Act is a provision allowing employees to obtain reimbursements from health savings accounts (HSAs), flexible spending accounts (FSAs), and health reimbursement accounts (HRAs) for expenses incurred for over-the-counter drugs and medical supplies without a prescription, repealing a decade-old restriction imposed by the Affordable Care Act. In addition, amounts paid for menstrual care products, including tampons, pads, liners, cups, sponges, or similar products, are now treated as incurred for medical care and can be reimbursed from an HSA, FSA, and HRA.
This expansion of reimbursable expenses will not trigger a change in status under the Code Section 125/cafeteria plan rules. As a result, employees will not be able to start or increase their FSA contributions.
These provisions are effective for amounts paid after December 31, 2019. Employers that wish to take advantage of these changes should amend their plans as soon as possible and should consult with their third party administrators as to a timeline for implementing these changes. Until debit cards are updated to reflect the expansion of reimbursable expenses, employees may need to submit claims for reimbursement after their purchase.
Visit our COVID-19 Resource Center often for up-to-date information to help you stay informed of the legal issues related to COVID-19.