May 2020 Edition
Coronavirus CARES Act Updates and FAQ
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Dear Valued Sterling Accountholders,
There is a substantial amount of new information to digest daily through these times. The federal government has postponed tax filing deadlines and passed new legislation, namely, the Families First Coronavirus Response Act (or FFCRA) and the Coronavirus Aid, Relief, and Economic Security (or “CARES”) Act. This edition of our newsletter focuses on FAQs regarding the new tax deadline and the CARES Act as they relate to HSA, FSA, and HRA plans. We will continue to share relevant information with you.
Please visit our new
Coronavirus FAQ
online now for answers to common questions.
A note to all accountholders -- we have online ACH payments available. Especially important during these times, online transactions will be faster than paper checks. Contact us if you need help getting set up.
Lastly, by popular demand, effective June 1 we will offer an extended menu of choices via our phone line (1-800-617-4729), to get you to your product specialist more quickly. Beginning June 1, additional phone options will include: press 4 for HSA; press 5 for FSA; press 6 for HRA. New phone hours will be 8-5 PST.
Thank you for being a Sterling accountholder. If you have any questions, please
reach out to us
.
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What is the HSA Contribution Deadline?
As a follow-up to IRS Notice 2020-18, the IRS has confirmed that accountholders can make contributions to health savings accounts (HSAs) for the 2019 plan year up to the new filing deadline of July 15, 2020. The IRS states that contributions to an HSA may be made at any time during the year or by the due date for filing that year’s tax returns. This rule applies to the new federal income tax filing deadline for 2020, which the IRS extended in response to the COVID-19 crisis. Contact Sterling for help with your HSA contribution questions.
Does my HSA Cover Covid-19 Testing and Treatment?
The IRS has issued Notice 2020-15 on March 11, 2020, which allows high-deductible health plans (HDHPs) to cover testing and treatment for COVID-19 without a deductible. In other words, coronavirus testing and treatment are considered qualified medical expenses under an HDHP, and people can use HSA funds to pay for it. Due to the COVID-19 national health emergency, Notice 2020-15 also applies to HDHPs that would otherwise be disqualified under Internal Revenue Code section 223(c)(2)(A). In other words, HDHPs that provide additional health benefits covering coronavirus testing and treatment, and HDHPs with a deductible that falls below the minimum requirement are also subject to the Notice.
Does the CARES Act Expand the List of Reimbursable Expenses through an HSA? (Over-the-Counter (OTC) Drugs and Menstrual Care Products)
YES! The CARES Act states that consumers can purchase OTC drugs and medicines with funds from their health savings account (HSA), flexible spending accounts (FSA), or health reimbursement arrangement (HRA). Consumers may also receive reimbursement for OTC purchases through those accounts. The Act also includes menstrual products as a qualified medical expense, meaning consumers can pay or seek reimbursement for purchasing these products through an HSA, FSA, or HRA. This provision is effective for purchases and reimbursements of expenses incurred after December 31, 2019. It does not have an expiration date.
- We expected merchants to start adopting changes for OTC items around April 15 and menstrual care products around May 15. However, merchants may take up to a month to complete the changes that will allow consumers to purchase these items with a card swipe.
- If consumers try to purchase these items with their benefits card before systems have been updated and the transaction is denied, they can submit a claim for reimbursement.
What Has Changed Regarding Telehealth?
The CARES Act states that "telehealth and other remote care services" below the deductible will be permitted in an HSA-compatible high deductible health plan (HDHP). This provision is effective immediately and will expire December 31, 2021.
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Does the CARES Act Expand the List of Reimbursable Expenses through an FSA? (Over-the-Counter (OTC) Drugs and Menstrual Care Products)
YES! The CARES Act states that consumers can purchase OTC drugs and medicines with funds from their health savings account (HSA), flexible spending accounts (FSA), or health reimbursement arrangement (HRA). Consumers may also receive reimbursement for OTC purchases through those accounts. The Act also includes menstrual products as a qualified medical expense, meaning consumers can pay or seek reimbursement for purchasing these products through an HSA, FSA, or HRA. This provision is effective for purchases and reimbursements of expenses incurred after December 31, 2019. It does not have an expiration date.
- We expected merchants to begin adopting changes for OTC items around April 15 and menstrual care products around May 15. However, merchants may take up to a month to complete the changes that will allow consumers to purchase these items with a card swipe.
- If consumers try to purchase these items with their benefits card before merchants have updated their systems and reject the transaction, they can submit a claim for reimbursement
Can Dependent Care FSA Participants Who Have Lost Preschool and Childcare Services Due to Facility Closures Reduce Their DCA Elections or Terminate Altogether?
Yes. Participants can reduce or terminate their dependent care account elections under these circumstances, as their childcare needs have changed. However, we advise accountholders to keep in mind that they may not need to change or revoke their plan elections, even if they are not incurring any new dependent care expenses. Accountholders may be able to claim their full plan year elections once the shelter-in-place orders cease, as childcare expenses can often reach the $5,000 annual contribution limit within 2-5 months. Contact Sterling if you have any questions regarding dependent care account election modifications.
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Does the CARES Act Expand the List of Reimbursable Expenses Through an HRA? (Over-the-Counter (OTC) Drugs and Menstrual Care Products)
Maybe! It depends on how your employer's specific HRA is set up. Reimbursable expense rules under an HRA plan vary from employer to employer, so please check with your HR department and review your HRA plan documents.
The CARES Act states that consumers can purchase OTC drugs and medicines with funds from their health savings account (HSA), flexible spending accounts (FSA), or health reimbursement arrangement (HRA). Consumers may also receive reimbursement for OTC purchases through those accounts. The Act also includes menstrual products as a qualified medical expense, meaning consumers can pay or seek reimbursement for purchasing these products through an HSA, FSA, or HRA. This provision is effective for purchases and reimbursements of expenses incurred after December 31, 2019. It does not have an expiration date
.
- We expected merchants to begin adopting changes for OTC items around April 15 and menstrual care products around May 15. However, merchants may take up to a month to complete the changes that will allow consumers to purchase these items with a card swipe.
- If consumers try to purchase these items with their benefits card before systems have been updated and the transaction is denied, they can submit a claim for reimbursement.
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FSA Store and HSA Store for Eligible Items
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Sterling Administration partners with HSA Store and FSA Store, an easy-to-use online shopping platform that takes the guesswork out of what is eligible with your FSA and HSA plans. FSA and HSA Store has 24/7 chat and online help, to assist you with any questions you have.
- For a list of FSA-Eligible items, click here.
- For a list HSA-eligible items, click here.
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Don't forget to use these valuable coupons when you shop!
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Did you Know? Your HSA Keeps Working After you Retire
Retirees cannot contribute to HSAs after enrolling in Medicare – but they can still retain and use the funds in HSAs they previously established. If you don’t use the money in your HSA, you retain it. HSAs are also portable – meaning that when you change jobs or health insurers, you bring your HSA with you – even when you enroll in Medicare.
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Thank you for being a Sterling accountholder. We are grateful to serve you. As we navigate, together, through this community health crisis we are under, please take care of yourselves and your families.
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