CARES Act – FSA Implications

April 2nd, 2020 by Thomas Harte

The CARES Act includes two key provisions that will help the millions of Americans with FSAs, HSAs and HRAs during a time where these plans may be needed most.

• OTC Rx Repeal: Prescriptions (Rx) will no longer be required for over-the-counter (OTC) drugs, including items like Tylenol, Claritin, Tamiflu, etc. when purchased with an FSA, HSA or HRA, effective immediately and retroactive to January 1, 2020. Prior to the CARES Act; FSA, HSA and HRA OTC drug purchases have required a prescription since 2011 per the Patient Protection and Affordable Care Act. This change caused confusion and unnecessary trips to the doctor, and the welcome relief will mean that Americans with FSAs, HSAs and HRAs can again buy the OTC medicines they need to stay healthy now and in the future.
  • FSA Debit Card Purchases:  In order for the card to work for OTC items the merchants will have to update their inventory approval system.  Until the merchants have all their systems updated there will likely be some inconsistencies in shopping experiences for FSA plan members.
• Menstrual Care Products: The new allowance of menstrual care products as eligible under an FSA, HSA or HSA, effective immediately and retroactive to January 1, 2020. The bill indicates that this addition means a “tampon, pad, liner, cup, sponge, or similar product used by individuals with respect to menstruation” will qualify.

Please note:  The expense table providing the list of eligible items through the FSA Store and similar sites will update with these new requirements as soon as possible.