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Posted March 26, 2021

Using HSA or FSA to Cover COVID

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The price of treating COVID can reach five figures for many American families. And while the burden of cost is often at least partially shouldered by health insurance companies, large employers, and state and federal governments that waived the costs of testing and treatment, that depends on where you live and who you work for. With that in mind, we answer a few common COVID-related questions as it pertains to your health savings account (HSA) or medical flexible spending account (FSA).

Can I use my HSA or FSA for masks and sanitizers?

The IRS just issued a clarification on the eligibility of personal protective equipment (PPE). Masks, hand sanitizer, and sanitizing wipes are now considered eligible expenses for HSA, medical FSA, and health reimbursement arrangement (HRA) funds when used “for the primary purpose of preventing the spread of coronavirus,” according to Announcement 21-7.

Can I use my HSA or FSA for COVID testing?

The passage of the Families First Coronavirus Response Act (FFCRA) on March 18, 2020 means most people should not have to pay for a COVID-19 test. However, in certain states, rapid (or antigen) tests and antibody tests can be quite costly. Your HSA or medical FSA can cover these costs.

Can I use my HSA or FSA for COVID treatment or hospitalization?

Yes. 

Can I use my HSA or FSA for long-term complications from COVID?

Yes. Even once COVID is “gone,” its effects linger for many patients. Studies show that coronavirus survivors who were hospitalized frequently have long-term problems with respiratory dysfunction, reduced exercise capacity, PTSD, and depression/anxiety.

Can I use my HSA or FSA to cover health insurance premiums through COBRA?

Yes to HSA funds; no to FSA funds. Your HSA funds can be used to pay for COBRA premiums, and they can also be used on group health insurance premiums if the covered individual is receiving unemployment compensation under federal or state law. If you’ve been furloughed or laid off due to the pandemic and are on COBRA, your HSA can cover health insurance premiums.

Can I use my HSA or FSA for the COVID vaccination?

Yes, but you won’t need to use your HSA or FSA funds for one. According to the CDC, the federal government is providing the COVID-19 vaccine for free to U.S. residents.

Within reason, you can use your HSA to address any of the above concerns, from testing to hospitalization to related mental health concerns to the vaccine itself. In fact, consumer research that WEX conducted earlier this year found that COVID has led more Americans to see the value of HSAs. As a result of the COVID-19 outbreak, roughly a quarter of the accountholders we surveyed said they are now contributing more to their HSAs. When unexpected healthcare costs strike, as they certainly have this year, it can be a great comfort to have money set aside specifically to cover what ails you and your loved ones.  

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The information in this blog post is for educational purposes only. It is not legal or tax advice. For legal or tax advice, you should consult your own counsel.

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