Flexible Spending Account Updates
American Rescue Plan Act (ARPA): On March 26, 2021, ARPA was passed. The IRS released Announcement 2021-7, which states that amounts paid for personal protective equipment (PPE) used for the primary purpose of preventing the spread of COVID-19 now qualify for medical care under § 213(d) of the Internal Revenue Code. PPE is now eligible for reimbursement under a Health Flexible Spending Account (FSA) plan and Health Savings Account (HSA). The following examples of PPE are now eligible for reimbursement: masks, hand sanitizer, and sanitizing wipes. Expenses incurred on or after January 1, 2020 are eligible.
Consolidated Appropriations Act of 2021 (CAA): On December 27, 2020, the CAA Act was passed. There were several provisions introduced that impact Flexible Spending Account (FSA) plans. Brown University has adopted some of these exciting changes, including the following:
- Allowing a grace period extension.
- Allowing mid year changes to the Health Care FSA without a qualifying event.
- Adopting a special carry forward rule for the Dependent Care FSA where a dependent aged out during the pandemic.
Coronavirus Aid, Relief and Economic Security (CARES) Act: On March 27, 2020, the CARES Act was passed retroactively effective January 1, 2020. As a result, the following benefits are now available:
- Over-the-counter (OTC) drugs and medicines – these items are now eligible for FSA and HSA reimbursement. Eligible items include allergy medicine, cold and flu medicine, pain relievers, and more. In addition, it expands the definition of qualified medical expenses to include menstrual care products. View eligible expenses.