According to new guidance from the IRS, the personal protective equipment (PPE) people use to help stop the spread of COVID-19 is now a deductible medical expense under IRC Section 213(d). Common items that we all need to buy, like masks, hand sanitizer and sanitizing wipes, could now be part of someone’s medical-expense deduction on their personal income tax return. These items could also count as reimbursable expenses under certain account-based health coverage options.
Employers that offer employees access to health FSAs, HRAs, Archer MSAs and/or qualified high-deductible health plans (HDHPs) that pair with HSAs need to take note of this change. Now, plan participants may be able to use funds from those accounts to pay for PPE.
Another consideration for group plan sponsors is that if coverage offerings include either an HRA, a health FSA or both, then a plan amendment could be necessary to make PPE a reimbursable expense. Employees with HSAs and Archer MSAs will automatically be able to use their HSA or MSA monies to pay for PPE, but health FSA and HRA participants will need their employer to decide if PPE is on the reimbursable-expense list.
Source: National Association of Health Underwriters – NAHU