Maximizing Consumer Accounts during COVID-19

Employees are facing a whole new set of challenges, from remote working to home schooling.

They’re also likely facing some extra challenges on their wallets with family members’ reduction of hours and economic slowdowns. The good news is, employees with consumer accounts probably have some benefits they’re not using.

On Friday, March 27, the federal government passed the “CARES” Act (Coronavirus Aid, Relief, and Economic Security Act). This act provided relief and guidance in many forms to individuals and organizations. Among these provisions were new items on the eligible expenses list that individuals with consumer accounts may purchase pre-tax, and a new provision for telehealth for HSA participants.

Here are some ways to help employees maximize their consumer accounts as they navigate the next few months. We will break down some creative solutions, tips and helpful information regarding a couple of key consumer accounts.

FSAs, HSAs, and HRAs

New eligible expenses. Great news, the CARES Act includes two new categories into the eligible expense list. The eligibility is retroactive to January 1, 2020; so, any purchases of these items with documentation can be claimed for reimbursement.

• Over the Counter (OTC) medications are now an eligible expense WITHOUT a prescription. Individuals with an HSA, FSA, or HRA may now purchase OTC items with their consumer accounts. This is a permanent change.
• Menstrual care products have also been added to the eligible expense list; defined as tampon, pad, liner, cup, sponge or similar product.

Find Money. Encourage employees to start a receipt scavenger hunt – locate unsubmitted receipts for eligible items (including the new ones listed above), dental or vision expenses paid out of pocket in 2020. They can submit claims to your consumer accounts provider to get cash back in pocket within days. Additionally, provider offices and pharmacies can often provide documentation after the fact if the participant has misplaced it.

Purchase power. For participants in need of virus treatment or prevention, there are multiple eligible items for an FSA or HSA, including thermometers, saline sprays, heating pads, nebulizer equipment and more. Your employees can order online from providers if needed to prevent trips to the store. HRAs that cover IRS 213(d) expenses can also be used for items like these.

Family counts. Your participants can use most consumer accounts for themselves AND their spouse and/or dependents, if the expenses weren’t already paid by the health plan.

Mental Health check-in. In addition to any EAP benefits your organization might provide, most consumer accounts can also be used to pay for mental health expenses not covered by their plan. Qualified psychologists or psychiatrists can help employees with tactics to combat issues like depression and anxiety during this difficult time.

HSAs

The IRS issued new guidance for HDHPs (high deductible health plans). Testing and treatment will be considered POST-deductible, allowing members in need of COVID-19 testing or treatment to have services covered first-dollar as “preventative care.” This directive does not change the high deductible for any other treatments, and the plan will work as designed for all other medical expenses. Enrollees in HDHPs are eligible for HSAs, and those with HSAs will be able to get treatment and testing without depleting their HSA funds.

Telehealth services covered. The CARES Act now provides coverage for telehealth services pre-deductible without impacting HSA eligibility. Currently, this provision of the deductible waiver for telehealth is slated to end December 21, 2021.

Allow mid-year enrollment in HSAs where applicable. Many HSA plan designs allow rolling enrollment; those with upcoming or current expenses can open and fund an account within a few days and capitalize on the tax savings to pay upcoming expenses. Communicate to employees the value and ease of opening an account TODAY to help with tomorrow’s medical expenses.

Seed Funds. If you have an option to channel any emergency funds to employees, you could seed HSAs with a mid-year or one-time contribution. Consult with your TPA to verify any plan document amendments.

Boost contributions now for tomorrow’s needs. Employees can modify their contribution amount at any time during the year. Encourage employees to set aside just $20-$30 more per month. Just $25 more per month equates to an additional $1,500 over five years, and with long-term investment options, can grow even more.

HSAs are fully portable for offboarding employees. As a personally owned account, funds are available for use until the HSA is exhausted. Typically, employees would be responsible for a minimal ongoing maintenance fee; otherwise, the funds are theirs to use, save or transfer to a future employer’s plan.

• HSA funds can be used to pay premiums for COBRA or exchange plans
• HSA funds can be used to pay out-of-pocket expenses for urgent care visits and other medical needs

Healthcare FSAs

Enrollment options. Most FSAs are locked and loaded for 2020, but employers with non-calendar year effective dates can still encourage employees to enroll and set aside funds for later this year.

Full election available now. For stable employees, projected elections are available on the FSAs effective date, possibly freeing up money for medical expenses now.

Offboarding employees should be encouraged to use all accrued (not advanced) funds in their account before account expiration if possible. If their FSA will be active through the end of the month, for example, they can go ahead and purchase glasses, contacts, first aid, pay for dental care, etc., before the benefit expires.

Consumer accounts can provide a safety net for volatile times. Make sure your employees are taking full advantage of their funds.

For a full listing of IRS guidelines around eligible expenses, refer to this IRS document.