People with a health savings account now have more flexibility in how they use the money because of rule changes prompted by the coronavirus outbreak.
Health savings accounts, or HSAs, let people save and invest for health and medical costs. The accounts have multiple tax benefits. Money is deposited into an HSA tax free and grows tax free. You can also withdraw money from the account tax free, as long as it is spent on eligible expenses.
The accounts are available to people with health plans that meet specific criteria, like a high deductible — an amount you must pay for care before coverage starts. For 2020, your plan must have a deductible of at least $1,400 for an individual or $2,800 for a family to qualify for an HSA.
People can use the accounts to help pay for care until they meet their deductible or can let the money grow for future health costs
Now, thanks to updates tucked into an early round of the federal coronavirus assistance program, people with HSAs can take advantage of expanded benefits.
You can now use your HSA to buy nonprescription medications like pain relievers and allergy pills, because the new law reversed a rule that had required patients to get a prescription to use their HSA or a similar account — like a flexible spending account, known as an FSA — to pay for most over-the-counter medicines.
The rule caused frustration because people had to ask their doctor for a prescription to buy items that didn't normally require one. Now, if they need aspirin or cough medicine, they can just swipe their HSA debit card. The change is retroactive to Jan. 1.
What's more, holders of both HSAs and FSAs can now use those funds to pay for menstrual products, including pads and tampons.
