The Cares Act was signed into law on Friday as an additional piece of legislation crafted to help Americans during the COVID-19 (coronavirus) pandemic. It includes a number of provisions that affect your employee benefits plans. We’ve outlined a few of the highlights below.
OTC products as eligible expenses
The CARES Act permanently reinstated over-the-counter products as eligible expenses for Health Savings Account (HSA), Flexible Spending Account (FSA) and Health Reimbursement Arrangement (HRA) funds without a prescription. This reverses laws put in place by the Affordable Care Act nearly 10 years ago, which stated that those expenses were only eligible for reimbursement with a prescription. This change takes place retroactive to January 1, 2020.
Menstrual care included as eligible
Menstrual care products were added as eligible expenses as part of the legislation. That means employees can now use their HSA, FSA and HRA funds to purchase items such as tampons, pads and menstrual sponges. This change also takes place retroactive to January 1, 2020.
HDHPs and telehealth services
The CARES Act temporarily allows High-Deductible Health Plans (HDHPs) with an HSA to cover any telehealth or remote care expenses, even if the participant hasn’t reached his/her deductible. This change continues through 2020 and 2021 (for calendar year plans). This comes after the recently passed Families First Coronavirus Response Act required certain coronavirus-related telehealth expenses to be covered with no cost sharing.
How OTC changes affect your Plan
Since FSAs already covers a limited number of OTC products today, manual claims for OTCs and menstrual items purchased on or after January 1st 2020 will be considered for reimbursement. SIGIS is currently reviewing the legislation and we expect them to expand the capabilities of the Pro-Flex Benefit Card to accept transactions for the expanded OTC list and menstrual items over the course of the next 2-4 weeks.
HSA members may request a distribution to reimburse themselves for eligible OTCs and menstrual items purchased on or after January 1st, 2020. Distributions can be requested via the Employee Portal or by using the Distribution Request Form found on the Pro-Flex website under Plan Participant Information. The Pro-Flex Benefit Card can be use to purchase items on the expanded OTC list and menstrual care once the SIGIS update is complete.
If your HRA already covers IRS Section 213(d) expenses, manual claims for OTCs and menstrual items purchased on or after January 1st 2020 will be considered for reimbursement. The Pro-Flex Benefit Card can be use to purchase items on the expanded OTC list and menstrual care once the SIGIS update is complete. Restricted HRAs that cover a limited set of expenses, such as deductible only HRAs, will not be impacted.
We will continue to update you as we have additional information to share regarding this regarding the legislations and its impact on your benefit plan(s).
If you have specific question regarding your plan, eligible items or the impact of the CARES Act on your benefits, please contact your Benefits Account Manager directly for further information or call our office at 716-634-7070.