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.

The aid program also temporarily relaxed rules for telehealth services. Until the end of 2021, HSA health plans may cover telehealth and other remote care services without charge before you meet the plan deductible.

Telehealth is seen as a way to help curtail transmission of the coronavirus because patients don’t have to put themselves or others at potential risk by seeking treatment in person.

If you want to make an HSA contribution for 2019, it’s not too late. You can contribute for 2019 up until the federal income tax filing deadline, which has been extended to July 15 because of the pandemic. You may contribute up to $3,500 annually for an individual, and $7,000 for a family, for 2019. People 55 and older can save an extra $1,000.


Ann Carrns writes for the New York Times.