As we approach the end of the year, and for some, the deadline to “use or lose” some or all of their Flexible Spending Account (FSA) balances, we’d like to make stakeholders aware of the expanded IRS list of qualified expenses. In deference to the COVID-19 pandemic, the IRS has added several items to the list of Section 213(d) authorized eligible expenses for tax preferred spending accounts such as FSA, HSA, and some HRAs.
The Affordable Care Act (ACA), passed into law in 2010, made over the counter (OTC) medications subject to a written prescription in order to be eligible for reimbursement under HSA, FSA, and some HRAs. This requirement no longer applies, and account holders can now use tax preferred spending account funds for the following OTC medications without a prescription:
In addition, the following products are now included in IRS Section 213(d) and are thus eligible for reimbursement under FSA, HSA, and certain HRAs –
Here’s a great resource to search out all spending account eligible expenses – https://learn.hellofurther.com/Individuals/Spending_Your_Account/Eligible_Expenses
As a reminder, many FSA plans allow up to $500 of unused funds set aside for unreimbursed health/dental/vision to rollover to the following year, without counting toward that year’s cap. We recommend checking with the appropriate resource to verify specific rollover allowances. Note: HSA funds are NOT subject to a “use it or lose it” provision, and simply remain in the account year over year. Lastly, we recommend checking with the appropriate resource to verify expenses eligible for reimbursement under an HRA.
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