While a lot has been said about the Coronavirus stimulus checks and the temporary increase to the amount of unemployment benefits one could receive, the changes to regulations for FSAs (flexible spending accounts) and HSAs (health savings accounts) accounts have not been given as much attention. In “Health Savings Accounts Get Even Better,” Kiplinger.com informs readers of how they can take advantage of these changes which are part of the Coronavirus Aid, Relief and Economic Security (CARES) Act, some of which are permanent.
This legislation offers more leeway with regards to what items are eligible for purchase with an HSA or FSA. If you bought over-the- counter medication or feminine hygiene produces after January 1, 2020, some of these things may be eligible for reimbursement if you didn’t use health accept funds to purchase them.
If you don’t know much about HSAs, Kiplinger.com explains, “A health savings account is a powerful tool to cover out-of-pocket medical expenses: Contributions are pretax (or tax-deductible, if your HSA is not employer-sponsored), the funds grow tax-deferred in the account, and withdrawals are tax-free for qualified medical expenses, without a time limit. An HSA is a smart way to save for medical expenses in retirement, too.”
And if you have a high-deductible health plan and an HSA, your telehealth services may be covered.
People who have FSAs and find themselves let got from work may be able to turn in receipts for medical expenses they had while they were on this job ((but only those incurred while they were working, unless they elect to get COBRA coverage.) There is also more flexibility with regards to making changes to benefits: if your employer allows it, you can make the kinds of changes that are usually only allowed during an annual open enrollment period. To clarify, the IRS is permitting these changes to occur in the middle of the year but your employer also has to be on board.
You may be able to change the amount of money you set aside in an FSA mid-year instead of having to wait months for an enrollment period. Things like this will be a difference for people who had money deducted for child-care or for an operation and found they could not use the money and planned because of closures related to the pandemic.