On March 26, 2021, the Internal Revenue Service (IRS) released IRS Announcement 2021-7, which states that personal protective equipment such as masks, hand sanitizer, and sanitizing wipes that are purchased “for the primary purpose of preventing the spread of COVID-19” (COVID-19 PPE) are qualified medical expenses under Section 213(d) of the Code.
Health savings account (HSA) participants may likely use the funds in their HSA to pay for masks, hand sanitizer, and sanitizing wipes on a pre-tax basis. Sponsors of flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs) may also allow these expenses to be reimbursed from their plans.
Many plans will be drafted to allow all Section 213(d) medical expenses, now including COVID-19 PPE, and may not require any amendment for these expenses to be eligible back to January 1, 2020. If an amendment is required, then plan sponsors must make the election change prior to December 31, 2022 in order for the change to be retroactive to January 1, 2020. Plan sponsors should review their documentation with their legal counsel to determine if they need to make any amendments in light of the new announcement.
For HSA, FSA, and HRA participants, the IRS has issued additional guidance with the goal of increasing flexibility surrounding health care purchases and reimbursements possible during the pandemic. Questions about reimbursements for COVID-19 PPE should be directed to your human resources representative or plan administrators.
To learn about other eligible medical expenses related to the pandemic, such as COVID-19 at-home testing kits, over-the-counter cold/flu medications, and more, review our blog: Create Your COVID-19 Tool Kit with FSA or HSA Funds
For more information and ongoing updates about legislation related to benefits and the COVID-19 pandemic, visit our COVID-19 Resource Center.