Archived Insight | September 21, 2021

At-Home COVID-19 Tests Are a Reimbursable Medical Expense

The IRS recently announced that the cost of an at-home COVID-19 test is an eligible medical expense. The cost is reimbursable from a health Flexible Spending Account (FSA), Health Savings Account (HSA), Health Reimbursement Arrangement (HRA) or Archer Medical Savings Account (MSA).

At-Home COVID-19 Tests Are a Reimbursable Medical Expense

Other expenses related to COVID-19 are also reimbursable

The IRS announcement on at-home COVID-19 tests also reminds taxpayers that other expenses related to COVID-19 are also reimbursable from health FSAs, HSAs, HRAs and Archer MSAs, including these:

  • Masks
  • Hand sanitizer
  • Sanitizing wipes

We discussed that earlier IRS announcement on COVID-19-related PPE in our March 30, 2021 compliance insight.

Action items

Plan sponsors should determine what types of COVID-19-related personal protective equipment (PPE) and/or COVID-19 home testing their health plans will cover.

Plan sponsors should work with their plan administrator to determine what substantiation will be required for coverage of these items and communicate that information to plan participants.

In addition, plan sponsors should prepare to answer questions from participants about those expenses.

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This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.