COVID-19 Updates

Last Update: 04/15/20

CARES Act & Plan Clarification

Firstly, we hope everyone is doing well and staying safe during these unprecedented times.

Secondly, in light of the recently passed CARES Act, and its impact on Flexible Spending Accounts (FSAs), we wanted to provide a few details about this piece of legislation, as well as answers to some of the more common FSA Plan-related questions that have come up as a result of the COVID-19 pandemic.

CARES Act Impact on Health FSAs

Section 3702 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which Congress passed on Friday, March 27, 2020, now allows Health FSAs to be used to purchase feminine hygiene products. Further, a Health FSA can also now be used to purchase over-the-counter (OTC) drugs and medicines, without a prescription.

These changes are permanent and are retroactive for all purchases of this type made after December 31, 2019.

Common Health FSA Questions

I am currently not working or working fewer hours due to COVID-19. Am I able to decrease my Health FSA election amount?

Yes. Listed below are election change reasons allowed by the IRS:

  • Reductions in hours that cause losses in coverage
  • Change in status
  • FMLA (Family and Medical Leave Act) leave
  • Substantial change in employer benefits/cost

If I now have more medical expenses due to the COVID-19, can I increase my FSA election amount?

Unfortunately, no. Incurring more medical expenses does not currently qualify as an eligible reason to increase your Health FSA election amount.

I have been temporarily or permanently separated from my job. Can I still get reimbursed for eligible expenses?

Yes. If you have been involuntarily separated, either temporarily or permanently, you can still submit claims for eligible expenses incurred up to your termination date, and in doing so, you have until the conclusion of the termination run-out period specified in your plan.

Has the IRS expanded the list of eligible expenses list because of COVID-19?

Yes. With the passing of the CARES Act, Health FSAs can now be used to purchase feminine hygiene products and over-the-counter (OTC) drugs and medicines without a prescription from a physician. This is a permanent change to the eligible expense list and includes retroactive purchases made after 12/31/2019.

I tried using my benefits card to purchase an over-the-counter (OTC) medication, but the sale was declined—why did this happen?

This is likely a result of the global transaction approval system still being updated to include the new list of eligible expenses. In the interim, you can submit your expense for reimbursement using one of your Plan’s convenient methods (portal, mobile app, or paper form).

Common Dependent Care FSA (DCAP) Questions

I am currently not working or working fewer hours due to COVID-19. Am I able to decrease my DCAP FSA election amount?

Yes. Listed below are election change reasons allowed by the IRS:

  • Reductions in hours
  • Change in employment status
  • FMLA leave
  • Substantial change in employer benefits/cost
  • Change of cost from the provider
  • Change of providers resulting in change of cost

My child’s school is closed due to COVID-19, and I still must work. Can I increase my DCAP election?

Yes. You may increase your election up to your plan’s defined maximum election if the child that is now unable to attend school results in an increase in childcare expenses.

I have been temporarily or permanently separated from my job. Can I still get reimbursed for eligible expenses?

Yes. If you have been involuntarily separated, either temporarily or permanently, you can still submit claims for eligible expenses incurred up to their termination date, and in doing so, have until the conclusion of the termination run-out period specified in your plan. Please note that you’re only allowed to be reimbursed for eligible expenses up to the amount you have contributed to your Dependent Care FSA.

My child’s daycare is currently closed due to COVID-19. Do I still need to provide valid documentation for reimbursement on Dependent Care expenses?

Yes. The IRS does require proper documentation for all reimbursements, which are made from your Dependent Care FSA.

More Info for Your Benefit

Should you have any other questions, please do not hesitate to call our customer care center at 888.338.4419—we’re here to help. You can also send us a message through the form below. Stay safe and healthy!

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