The IRS recently announced that amounts paid for personal protective equipment (PPE) for the primary purpose of preventing the spread of COVID-19 are to be treated as 213(d) medical expenses (i.e., COVID-19 PPE). The IRS announcement did not define PPE but did include masks, hand sanitizer, and sanitizing wipes as examples.
What constitutes an eligible expense?
Because the IRS now considers COVID-19 PPE expenses as medical care under §213(d) of the tax code, these items are also eligible for reimbursement from Health Savings Accounts (HSA) and any Health Flexible Spending Arrangement (FSA) or Health Reimbursement Arrangement (HRA) which includes all 213(d) items. To be reimbursable, items must be for the primary purpose of preventing the spread of COVID-19 by the account holder, the account holder's spouse, or the account holder's dependent(s).
Plans which cover all 213(d) expenses will not require an amendment. Most Health FSA plans cover all 213(d) expenses, however, if an employer has limited their Health FSA plan's definition of eligible medical expenses, then the plan will require an amendment if the employer wishes to include COVID-19 PPE as an eligible expense. Similarly, HRA plans covering all 213(d) expenses will not require an amendment. If a plan amendment is required, then it must be adopted no later than the last day of the first calendar year beginning after the end of the plan year in which the amendment is effective, and the plan must be operated consistent with the terms of the amendment.
COVID-19 PPE expenses incurred on or after January 1, 2020, are eligible for reimbursement.
Which are examples of COVID-19 PPE?
Without further guidance, PrimePay's good-faith interpretation of COVID-19 PPE includes the following items:
- Masks (all varieties).
- Face shields.
- Protective eyewear.
- Disposable gloves (vinyl, latex).
- Hand sanitizer.
- Sanitizing wipes.
- Other items may be reviewed on a case-by-case basis.
How PrimePay can help.
PrimePay can administer pre-tax benefits for your company, including HRAs, HSAs, and FSAs. When you choose PrimePay’s pre-tax benefit plan administration, you receive a dedicated service team, access to our support portal, automated claims processing, and a PrimePay debit card and mobile app. Fill out the form below to learn more:
Disclaimer: Please note that this is not all-inclusive. Our guidance is designed only to give general information on the issues actually covered. It is not intended to be a comprehensive summary of all laws which may be applicable to your situation, treat exhaustively the subjects covered, provide legal advice, or render a legal opinion. Consult your own legal advisor regarding the specific application of the information to your own plan.