CARES Act + FSAs/HSAs

First, the act allows high-deductible health plans paired with HSAs to cover telehealth services before a patient has met the plan deductible. Normal cost-sharing can still be imposed for telehealth visits, such as through co-pays that the plan may require after the deductible is met. This provision is temporary and will sunset Dec. 31, 2021, unless Congress extends it or makes it permanent.

Second, the law permanently reinstates over-the-counter medical products as eligible expenses for HSAs, certain HRAs and FSAs without a prescription. This rolls back rules from the Affordable Care Act which required a prescription for eligible medical expenses.

Third, these accounts may now allow certain menstrual care products, such as tampons, pads, liners and cups, as eligible medical expenses. These are permanent changes and apply retroactively to purchases beginning Jan. 1, 2020.

On December 27, 2020, the Consolidated Appropriations Act, 2021 was signed into law expanding some provisions of the CARES Act. This relief package allows taxpayers to roll over unused amounts in their health and dependent care flexible spending arrangements from 2020 to 2021 and from 2021 to 2022.