The IRS has issued guidance (Announcement 2021-7) that indicates personal protective equipment (PPE) that prevents the spread of COVID-19 is eligible as a medical expense under IRC Section 213(d). The guidance confirms that PPE expenses can now be reimbursed through a HFSA, HRA, HSA and an Archer MSA.
PPE includes the following:
- Masks
- Hand sanitizer
- Sanitizing wipes
- Any other equipment for the primary purpose of preventing the spread of COVID-19
Effective Date and Plan Amendments
The effective date of this provision is effective January 1, 2020 so any PPE expenses incurred on or after January 1, 2020 are eligible for reimbursement. If employers wish to implement this provision, amendments to the cafeteria plan (or group health plan) 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. For calendar year cafeteria plans who implement this for 2021, the amendment should be signed no later than December 31, 2022.
Benefit Cards
Most service providers will work quickly to update the list of eligible expenses to include these items. SIGIS (The Special Interest Group for IIAS Standards) is one organization that several pharmacies/retail stores use to manage their eligible expense lists. SIGIS will update their eligible expense list for PPE expenses. Once SIGIS or other similar entities update their lists, pharmacies/retail stores that carry these PPE products must update their software systems to include these items as HFSA eligible expenses. Stores vary on how often they update their eligible expense items, some monthly, quarterly or annually. Until the stores have updated their eligible expense lists, benefits debit cards will not approve these types of expenses. However, HFSA participants can submit manual claims with appropriate receipts. The receipts should clearly specify the items that were purchased for the expense to be eligible for reimbursement.
This is great news for HFSA, HRA and HSA participants. TRI-AD will be implementing these provisions immediately in order for participants to purchase PPE items with their benefits card or to submit receipts for reimbursement for additional tax savings.
IRS Announcement 2021-7:
https://www.irs.gov/pub/irs-drop/a-21-07.pdf
TRI-AD’s COVID-19 Resources Page:
https://www.tri-ad.com/home/covid-19/
TRI-AD and our Associates’ suggestions or recommendations shall not constitute legal advice. No content on our website can be construed as tax or legal advice and TRI-AD may not be considered your legal counsel or tax advisor. Clients are encouraged to consult with their tax advisor and/or attorney to determine their legal rights, responsibilities, and liabilities. This includes the interpretation of any statute or regulation, federal, state or local; and/or its application to the clients’ business activities.