Can I Use My HSA or FSA Funds to Pay For My COVID-Related Costs?

December 17, 2020

COVID-19 will be a $16 trillion virus for the United States, according to a recent study by former Treasury Secretary Lawrence Summers and Harvard University economist David Cutler. The co-authors call the pandemic “the greatest threat to prosperity and well-being the U.S. has encountered since the Great Depression.” They attribute half of that enormous sum to costs for those who contract COVID-19, as well as for the virus’ long-term health implications and a statistical cost estimate for the loss of life.

Whether it’s measurable or not, what matters is that the price of treating COVID has been crippling for many American families. And while the burden of cost is often at least partially shouldered by health insurance companies, large employers, and state and federal governments that waived the costs of testing and treatment, that depends on where you live and who you work for. With that in mind, we answer a few common COVID-related questions as it pertains to your health savings account (HSA) or medical flexible spending account (FSA).

Can I use my HSA or FSA for COVID testing?

The passage of the Families First Coronavirus Response Act (FFCRA) on March 18 means most people should not have to pay to test for COVID-19. However, in certain states, rapid (or antigen) tests and antibody tests can be quite costly. Your HSA or medical FSA can cover these costs.

Can I use my HSA or FSA for COVID treatment or hospitalization?

Yes. Public health experts say that 15 to 20 percent of people who get COVID-19 and seek treatment may need a hospital stay. The cost of hospitalization for COVID ranges from $34,000 to $45,000, with people ages 51 to 60 charged the most. 

Can I use my HSA or FSA for long-term complications from COVID?

Yes. Even once COVID is “gone,” its effects linger for many patients. Studies have shown that coronavirus survivors who were hospitalized frequently have long-term problems with respiratory dysfunction, reduced exercise capacity, PTSD, and depression/anxiety.

Can I use my HSA or FSA to cover health insurance premiums through COBRA?

Yes to HSA funds; no to FSA funds. Your HSA funds can be used to pay for COBRA premiums, and they can also be used on group health insurance premiums if the covered individual is receiving unemployment compensation under federal or state law. If you’ve been furloughed or laid off due to the pandemic and are on COBRA, your HSA can cover health insurance premiums.

Can I use my HSA or FSA for the COVID vaccination?

Yes, but you shouldn’t need to. According to the CDC, vaccine doses purchased using U.S. taxpayer dollars will be given to the American people at no cost. However, vaccination providers will be able to charge an administration fee for giving the shot to someone.

Within reason, you can use your HSA to address any of the above concerns, from testing to hospitalization to related mental health concerns to the vaccine itself. In fact, consumer research that WEX conducted earlier this year found that COVID has led more Americans to see the value of HSAs. As a result of the COVID-19 outbreak, roughly a quarter of the accountholders we surveyed said they are now contributing more to their HSAs. When unexpected healthcare costs strike, as they certainly have this year, it can be a great comfort to have money set aside specifically to cover what ails you and your loved ones.  

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The information in this blog post is for educational purposes only. It is not legal or tax advice. For legal or tax advice, you should consult your own counsel.

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