Even though the Food and Drug Administration (FDA) approved the first at-home COVID-19 test in April 2020, we have seen more and more participants in tax-advantaged accounts and their employers inquiring whether this is an eligible expense in recent months. Many people find taking an at-home test more convenient than finding a local healthcare provider in their area with availability for testing.
Even though the Families First Coronavirus Response Act (FFCRA) says that your insurance company must pay for testing if it is deemed “medically appropriate,” most at-home testing kits must be paid for ahead of time by the company. They will encourage you to ask for reimbursement from your insurance company. Suppose your insurance company doesn’t cover the cost of at-home COVID-19 testing. In that case, you can use your Flexible Spending Account (FSA), Health Savings Account (HSA), or possibly a Health Reimbursement Arrangement (HRA) to pay for the test using pre-tax dollars.
Recently, the IRS issued a reminder that other personal protective equipment (PPE) purchased primarily to prevent the spread of COVID-19 are also eligible medical expenses with your FSA, HSA, and some HRAs. So if you are buying masks, hand sanitizer, or sanitizing wipes to prevent COVID-19, don’t forget to use these accounts to pay with pre-tax money.
At FBA, we partner with FSAStore.com, the largest online retailer specializing in eligible OTC expenses for tax-advantaged accounts. If you want to learn what other types of expenses are eligible, we highly recommend checking out their Learning Center.