Amounts paid for certain PPE treated as qualified medical expenses
Personal protective equipment (PPE) such as masks, hand sanitizer and sanitizing wipes purchased for preventing the spread of COVID-19 is now treated as a qualified medical expense (IRS Notice 2021-7).
On March 26, 2021, the Internal Revenue Service (IRS) released IRS Announcement 2021-7, which states that personal protective equipment (PPE) such as masks, hand sanitizer and sanitizing wipes that are purchased “for the primary purpose of preventing the spread of COVID-19” is a qualified medical expense under Section 213(d) of the Code.
Health savings account (HSA) participants may use the funds in their HSA to pay for masks, hand sanitizer, and sanitizing wipes on a pre-tax basis. Sponsors of flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs) may also allow these expenses to be reimbursed from their plans. Plan sponsors should review their plan documents with their legal counsel to determine if they need to make any amendments in light of the new announcement.
Effective immediately, Optum® will consider masks, hand sanitizer and sanitizing wipes qualified medical expense for claims processing purposes. Additionally, Optum will continue to review any further guidance released on this from the IRS.
We advise you to speak with your tax or benefits counsel regarding interpretation of the legislation.