Insights

IRS Reminds Taxpayers that COVID-19 Testing and PPE are Reimbursable under FSAs, HRAs and HSAs


On September 10, 2021, the IRS issued News Release 2021-181, which reminds taxpayers that the cost of COVID-19 home testing kits is a qualified medical expense and therefore eligible for reimbursement through a health FSA, HRA or HSA. A qualified medical expense is an expense related to the diagnosis, prevention or treatment of a health condition. Thus, the cost associated with the diagnosis of COVID-19 is a qualified medical expense.

Additionally, the cost of personal protective equipment (PPE), such as masks, hand sanitizer and sanitizing wipes used for the primary purpose of preventing the spread of COVID-19 is also a qualified medical expense eligible for reimbursement under a health FSA, HRA or HSA.

Employers and service providers that administer these plans should keep this guidance in mind when providing reimbursements.

News Release 2021-181 »