The amended rules under the Coronavirus Aid, Relief, and Economic Security (CARES) Act
provide flexibility for health-care spending related to the ongoing COVID-19 pandemic.
High-deductible health plans cover telehealth services
Under the CARES Act, a high-deductible health plan (HDHP) can temporarily cover telehealth
and other remote care services without a deductible, or with a deductible below the minimum
annual deductible otherwise required by law.
Telehealth and other remote care services also are temporarily included as categories of coverage
that are disregarded for the purpose of determining whether an individual who has other health
plan coverage in addition to an HDHP is eligible individual to make tax-favored contributions to
his or her health savings account (HSA). Thus, an otherwise eligible individual with HDHP
coverage may still contribute to an HSA despite receiving coverage for telehealth and other
remote care services before satisfying the HDHP deductible, or despite receiving coverage for
these services outside the HDHP. These changes are effective for services provided on or after
January 1, 2020 through December 31, 2021.
Additions to qualified medical expenses
The CARES Act also modifies the rules for “qualified medical expenses” that are reimbursable
from tax-advantaged health savings accounts (HSAs), Archer Medical Spending Accounts
(MSAs), health flexible spending accounts (FSAs), and Health Reimbursement Arrangements
(HRAs). Specifically, the cost of menstrual care products is now reimbursable. These products
are defined as tampons, pads, liners, cups, sponges and/or other similar products. In addition,
over-the-counter products and medications are now reimbursable without a prescription. The
new rules apply to amounts paid after Dec. 31, 2019. Taxpayers should save receipts of these
purchases for their records and so that they are able to submit claims for reimbursement.