Health Savings Account-Eligible Items in Demand: In the Moment and Looking Ahead
With public behavior changing as public spaces reopen, certain types of medical services and products have moved to the forefront of people’s minds. Health savings accounts (HSAs) can help participants procure some of those timely items and services.
In this article for account holders, we’ll give a brief overview of HSA basics and cover some of those top-of-mind eligible expenses you may be looking to purchase to maintain a safe, healthy balance, in light of COVID-19 restrictions beginning to lift.
Reminder: What Are Health Savings Accounts?
Time and time again, industry research and consumer-based surveys tell us that people commonly confuse the differences between HSAs and flexible spending accounts (FSAs). With this in mind, we thought a friendly little refresher on HSAs wouldn’t hurt!
An HSA can be used to pay for a wide range of eligible medical, dental, and mental health expenses for the owner and dependents. The money in an HSA can also be saved and invested for the long term. HSA contributions are set aside before taxes are taken out of a paycheck, so the amount of income the account holder pays on taxes is reduced.
The Benefits of HSAs
The HSA is often referred to as the 401(k) for health care, since it’s also a tax-advantaged account that can be used today or saved for later. The HSA belongs to the account owner, even with job and insurance plan changes. Owners don’t have to worry about losing it, because it never expires.
The HSA can be funded up to a maximum limit—whether at the individual level, or on a family basis (see the 2021 contribution updates here). In addition, if the money isn’t used on expenses, the unused funds continue to roll over year after year and earn interest.
Eligible Items and Services
Even seasoned HSA holders are sometimes surprised by the number of covered items and services. HSAs cover regular medical expenses like co-pays, deductibles, and prescriptions, as most people expect. However, HSAs also cover specialty services like chiropractic visits, orthodontia, speech therapy, and, in some cases, acupuncture.
The list of eligible items is even more expansive. Commonly-purchased items for the larger population, like sunscreen and lip balm, are covered for owners and their family members. Items specific to certain circumstances, like birth control products and denture supplies, are also covered.
On March 27, 2020, the U.S. Senate signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), in response to the COVID-19 virus. The bill made even more items eligible for coverage. For the first time, HSAs cover over-the-counter medicine and feminine care products, including tampons, pads, liners, cups, and sponges.
COVID-19 Changes: Looking Ahead
With restrictions lifting in certain cases, virus preparedness products are high in demand for both private and public use.
The infrared thermometer, for instance, now has a larger public role. Offices and day cares have begun monitoring people with a touchless forehead thermometer before allowing them to enter buildings.
In addition, U.S. officials at 12 American airports began checking passenger temperatures in May 2020. As of June 2020, Frontier Airlines began checking every ticketed passenger on their flights. Other airports and airlines are likely to follow suit. In fall when school begins again, districts are considering performing temperature checks on students as a regular part of the day. As a result, self-monitoring will increase for individuals and families.
As for services, COVID-19 has increased the use of telehealth appointments. When health care providers offer video appointments instead of in-person visits, the services are commonly covered by HSA. As for mental health services, which are a concern during the coronavirus era, online therapy apps (in some cases) are also eligible for HSA payment.
Consumer behavior changes with the environment, and while no one can predict what items and services will become popular, people can depend on their HSAs to help keep health care purchases affordable.
To purchase timely HSA-eligible products online, visit the CYC Marketplace.
About the Author
Carla Wardin lives in St Johns, Michigan, where she focuses her writing on the health and technology industries.
Disclaimer: ConnectYourCare does not provide tax or legal advice. This information is not intended and should not be taken as tax or legal advice. Any tax or legal information in this notice is merely a summary of ConnectYourCare’s understanding and interpretation of some of the current tax regulations and is not exhaustive. You should consult your tax advisor or legal counsel for advice and information concerning your particular situation before making any decisions.