Now is the time to enroll in an FSA/HSA

If you have an FSA or HSA, you realize its value now more than ever. In a year that saw over-the-counter medicines and feminine care products made eligible for FSA/HSA reimbursement, the addition of masks, hand sanitizer, and sanitizing wipes expands the pool of eligibility to cover even more essential health products. In a year where we all budgeted for these new health essentials, FSA/HSA users can now factor them into their yearly contributions. 

This is a permanent eligibility change

The IRS laid out in their guidance that there is no time limit or window of eligibility for these products and simply “as long as the costs for these items are to help prevent the spread of COVID-19.” 

But we recommend that FSA/HSA holders check with their HR department or benefits provider to make sure that these expenses will be eligible with their plans. For instance, some types of FSAs, such as dependent care FSAs (DCFSAs) or limited care FSAs (LCFSAs). When it comes to big, structural changes to benefits plans, it’s always best to err on the side of caution and chat with your HR representative.

You may be able to file retroactively for past expenses

One of the more interesting provisions of the IRS Announcement 2021-7 was “...to provide for reimbursements of expenses for COVID-19 PPE incurred for any period beginning on or after January 1, 2020.” That sounds great considering all the virus preparedness products we all have been buying over the past year! 

But there’s an important caveat: claims for masks, hand sanitizer, and sanitizing wipes can only be filed retroactively if your employer amends their FSA/HSA plans to allow this. So as you’re checking in with your HR rep or benefits administrator, this is a good question to keep in mind.

There’s still more info to come and questions for the IRS to answer. The IRS will have to outline requirements for essential features to make these products eligible. For instance, how much the alcohol concentration must be for a hand sanitizer to be eligible? Will this cover face shields? What about sanitizing sprays? These are all big questions we’ll be aiming to solve in the coming weeks as we roll out this new category of products, and as soon as we have answers, you’ll be the first to know.  

What’s next for FSA and HSA expansion?

This has been a busy year for FSA and HSA users! From over-the-counter medicines and feminine care products being made FSA/HSA eligible, thanks to the CARES Act, to temporary, optional FSA deadline extensions offered to employers at the end of 2020, lawmakers are realizing just how important tax-free healthcare accounts are for the health and wellbeing of everyday Americans. 

2021 could see future changes on the eligibility front, so stay on top of them by following our Facebook and Twitter pages or create an account on HSAstore.com and sign up for emails to be the first to know when these new products are in stock!