The CARES Act was signed into law on Friday, March 27th 2020 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 change takes place retroactive to January 1, 2020 enabling employees to submit claims for purchases made during this time.
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. These products would be treated as qualified medical expenses for purposes of these arrangements.
This change also takes place retroactive to January 1, 2020 enabling employees to submit claims for purchases made during this time.
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).
- Current Flyte FSA clients will be receiving a one page addendum including the new eligible expenses in the next two weeks; nothing is needed from the employer.
- HRA expenses depend on predetermined plan designs.
These changes will work with existing plan Debit Cards, but may take some time!
The industry standards group for inventory information approval systems (IIAS) is working with retailers such as Wal-Mart and Target to update the databases of expenses to include the over-the-counter medications and other products now considered eligible. The initial update is scheduled to be released to retailers on April 15th, 2020, but many more updates are anticipated in the following months as merchants and manufacturers submit items not currently in their database for eligibility review.
During this time of transition as the databases are updated, employees may experience some confusion or difficulties when:
- Using the Eligible Expense Scanner through the Flyte Mobile App, as this utilizes the industry standards group database.
- Using their debit card at a retailer such as Target. Items that are eligible may not yet be considered eligible to the retailer’s system.
- Reviewing their receipt for an expense purchased out-of-pocket. Expenses now considered eligible under a FSA or HSA may not yet be listed as eligible in the retailer’s system.
These expenses are eligible and may be submitted to Flyte HCM for reimbursement manually to the Health FSA or for a distribution from an HSA as these changes are rolled out throughout the country.
As you are working with your employee benefit programs, please keep these changes in mind. We are here to help with any questions as you navigate through this, so please don’t hesitate to reach out if you have any questions.
Our HR Pros are ready to help
Need assistance or have any questions about this communication? Our team of HR Professionals are ready to help you. Give us a call today at 952.746.0000 or email HRSupport@FlyteHCM.com