The CARES Act (Coronavirus Aid, Relief, and Economic Security Act) offers provisions giving persons affected by the COVID-19 crisis access to flexible healthcare spending for at-home services. In the following article, Optima Tax Relief reviews the new guidance for providing aid for healthcare services.
The Internal Revenue Service recently released new regulations under the CARES Act that offers spending allowances for healthcare services during the COVID-19 crisis. These new provisions were designed to improve access to diverse health services and lower overall healthcare costs.
High Deductible Health Plan Telehealth Coverage
The CARES Act allows for no- or low-deductible costs for access to remote healthcare services, including telehealth, for COVID-19-related issues for high deductible health plans enacted before December 31, 2021. This temporary provision also applies to the standard IRS rules which render deductible waivers ineligible for contributions to tax-advantaged Health Savings Accounts (HSA). This means that patients who have a high deductible health plan that is eligible for HSA contributions may use those high deductible health plans to access services, including telemedicine services for diagnoses, treatments, and even vaccinations for COVID-19 if they become available, at a reduced deductible and still qualify for HSA employer or personal contributions.
Qualified Medical Expenses Expansion
There have also been modifications of the regulations that pertain to qualified medical expenses in tax-favorable accounts such as Flexible Spending Arrangements (FSAs), Health Reimbursement Accounts (HRAs), and HSAs. Additional products and devices have become eligible as qualified medical expenses. This means that account-holders may qualify for reimbursements when purchasing such eligible items. Qualified items include products relating to menstruation (pads, liners, tampons, and other menstrual hygiene-related items) and over the counter pain relief products. Previously, the Affordable Care Act did not allow the use of pre-tax dollars on over-the-counter medications without a prescription. The CARES Act has repealed the requirement that over-the-counter medications have a doctor’s prescription in order to qualify for reimbursement. The new provision does not have an expiration date.
To learn more about how the CARES Act might affect your healthcare costs, please visit irs.gov for additional information.
Sponsored content
