Hi Wealth Warriors!!! I wanted to share some recent CARES Act information that hasn’t been widely publicized.
The CARES Act that was recently signed into law and most of the attention has been around the stimulus payments and the support for businesses. The CARES Act also made changes to eligible expenses for the health savings accounts.
Several years ago the Affordable Care Act (ACA) made Over-The-Counter medicine ineligible for reimbursement from Flexible Spending Account (FSA), Health Savings Account (HSA), and Health Reimbursement Arrangement (HRA). Under the ACA, these products required them to be prescribed by a physician in order to be considered an eligible expense and be reimbursable from the FSA, HSA, HRA.
Under the CARES Act, Over-the-Counter medicines as well as menstrual care products can be reimbursed from a FSA, HSA, and HRA accounts without a prescription. This will allow you to pay for these expenses with pre-tax money.
Not familiar with the FSA, HSA or HRA? These accounts allow you so save pre-tax dollars into an account and then use these pre-tax dollars to pay for eligible medical expenses. You essentially get a discount on your medical expenses in the amount of your marginal (highest) tax rate.