HSAs in the Era of COVID-19

Note: Harvard Pilgrim is monitoring the coronavirus (COVID-19) outbreak and what it means for our members and communities. If you are interested in specific information from Harvard Pilgrim regarding COVID-19, please visit our website.

Health care and health insurance in 2020 have been heavily impacted by the global pandemic we find ourselves living through, bringing about unexpected changes. Among these changes are modifications to Health Savings Account (HSA) guidelines that go beyond an HSA’s typical flexibility, portability and tax benefits.

Here’s a deeper dive into new HSA guidelines as a result of COVID-19:

Contributions Can Still Be Made for the Unemployed

For those who are recently out of work, having the funds to cover health care-related expenses is a major concern. Unlike Flexible Spending Accounts (FSAs), which typically force users to forfeit any money they don’t spend in a given year, HSAs don’t have to be spent by a certain date and are still available to you even if you are no longer employed.1

Additionally, because the IRS extended the tax deadline to July 15 this year, users can and should add funds to their 2019 HSA,2 or contribute money to another person’s HSA who may be experiencing difficulties paying for medical expenses.

No Deductible Requirements for COVID-19 Care

Due to legislative changes,3 if you have a high-deductible health plan with an HSA, you don’t need to meet your deductible before costs for COVID-19 testing and treatment are covered in full by your health insurance.

Broader Coverage of Products and Services

As part of the CARES Act signed into law at the end of March 2020, HSAs can now be used to cover the cost of over-the-counter drugs and medicine, such as allergy medications and pain relievers, without a doctor’s prescription.4 You can also use the dollars to cover the costs of essential items, such as protective masks, diapers and certain feminine hygiene products without tax or penalty on your HSA funds. This change is retroactive to January 1, 2020 and is set to remain permanent.

HSA dollars can also now be used to cover the cost of telehealth and mental health services,5 which are in high demand during this period as many refrain from in-person appointments.

Things to Keep in Mind 

While flexibility with HSA usage has increased, there are still limitations that exist on the account, so it’s important to review your plan before using. Additionally, those tempted to use HSA funds for non-medical purposes can expect to pay taxes on that money.

Overall, it’s best to check in with your health insurance provider to confirm your coverage levels and plan specifics, as some health insurers, such as Harvard Pilgrim, are covering these services in full during the pandemic, even for their members who are on high-deductible health plans with HSAs.


This article first appeared as featured content in Harvard Pilgrim’s HaPi Guide newsletter on June 25, 2020. To stay up-to-date on the latest healthcare topics such as the future of health care, new ways to be healthy or the business of insurance, sign up to receive our monthly communication:

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