The coronavirus has brought about changes to Health Savings Accounts (HSAs). The new guidelines will likely make the savings accounts more enticing than ever before. Here is what you need to know.
Previously, you could only make tax-free withdrawals from your HSA for prescription medications. The new rules allow you to make tax-free withdrawals for over-the-counter medications too. That includes pain relievers, cold medicine, allergy and acne medicines and much more. Keep in mind that this change is retroactive to the beginning of 2020. If you have receipts for these items, you can get reimbursed dating back to January 1 of this year.
The new HSA guidelines open up many items for tax-free withdrawals. OTC meds are especially helpful, but you can now use tax-free withdrawals on items like feminine hygiene products, first aid kits, thermometers, vaporizers, nasal sprays and contacts and prescription sunglasses and glasses.
No Testing Deductible
As US News reports, HSA policies generally dictate that all expenses — aside from some preventative care fees — be subject to deductibles. Now, under the new rules, coronavirus tests and telehealth services can be covered without being subject to deductibles. While the law stipulates the tests must be covered, it’s up to your insurance company to decide whether to cover or not cover telehealth visits. Contact your insurance company for clarity on HSA-covered telehealth visits.
This last HSA item isn’t new, but certainly could be helpful: You can make tax-free withdrawals to cover health insurance premiums if you’re getting unemployment benefits. As with all of these items, make sure you’re keeping detailed records and documentation to make the transactions as painless as possible.