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Covid-19 and The CARES Act Have Changed Some HSA and HDHP Rules

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If you have a Health Savings Account (HSA) you may have a solid handle on the basics. If not, check out our HSA guide that covers some of the important basics, but the key thing to remember is you need to have a High-Deductible Healthcare Plan (known as an HDHP) in order to fund your HSA. 

Ok, so now for news: The CARES Act, which Congress passed in March 2020 to cope with the coronavirus, changed some of the rules about how you can use the money in your HSA.

It also changed some deductible requirements if you’re covered by an HSA-eligible HDHP. 

As of now, this is what we know, but be sure to check with your human resources department, health insurer and HSA servicer for the latest information on how the CARES Act may affect your current health insurance plan.

Covid-19 testing and treatment – this matters if you have an HDHP paired with an HSA

If you’re being tested or treated for the coronavirus and have an HDHP, the CARES Act says you may not have to sweat the deductible (which can be pretty high). Your plan may cover the cost of getting tested and treated for the coronavirus. It may also cover any co-payments or cost-sharing, but it’s a good idea to check with your insurer to clarify what their policy is.

Telehealth services – this matters if you have an HDHP

This is also of particular note if you’re insured by an HDHP that includes an HSA. Under the CARES Act, health insurers can pay for telehealth services even if you haven’t reached your HDHP’s deductible, but these visits are limited to coronavirus. You may still need to pick up costs like co-pays, but you won’t pay for the full visit out of pocket. This is expected to run through December 31, 2021, unless Congress renews this provision.

Over-the-counter medications – this matters if you have an HSA

Before the CARES Act, you needed a doctor’s prescription to purchase allowed OTC medications using your HSA. Now you can skip the prescription part for OTC medical items you’d need while quarantined. You may also be able to use the money in your HSA account to buy thermometers, batteries for medical devices, first-aid supplies and cold and allergy medicines.

Plus, if you have receipts for any out-of-pocket items that you purchased since January 1, 2020, you may be able to get reimbursed from your HSA.

Check with your insurer to see what counts as a “qualified expense.” (Stress food doesn’t count.) 

Feminine hygiene – this matters if you have an HSA

It’s not really clear how this got rolled up into a Covid-19 bill (politics), but ladies, at long last you can use your HSA money to buy tampons and pads as well as some other feminine products that are now considered qualified medical items under the CARES Act. If you have receipts for these purchases that go back to January 1, 2020, you may be able to reimburse yourself from your HSA if you paid out of pocket.

What if you have a Flexible Spending Account (FSA)?

Good question. Some of the changes that affect HSAs affect FSAs, too, like the feminine hygine  and over-the-counter purchasing rules. (Your policy may cover telehealth and treatment regardless of your deductible status). We have some additional info on FSA and CARES Act for you.

Additional resources from Goldman Sachs

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This article is for informational purposes only and is not a substitute for individualized professional advice. Articles on this site were commissioned and approved by Marcus by Goldman Sachs®, but may not reflect the institutional opinions of The Goldman Sachs Group, Inc., Goldman Sachs Bank USA or any of their affiliates, subsidiaries or divisions.