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Personal Protective Equipment Now Considered to be FSA/HRA/HSA Eligible Medical Expense

The IRS recently released Announcement 2021-7 notifying taxpayers that amounts paid for personal protective equipment (PPE) such as masks, hand sanitizer, and sanitizing wipes, for the primary purpose of preventing the spread of COVID-19 now qualify as medical care expenses under § 213(d) of the Internal Revenue Code.

Because these COVID-19 PPE costs are now considered to be medical care expenses, they are also eligible to be paid or reimbursed under a health FSA, HRA, or HSA.

This addition is optional for the health FSA and HRA, and therefore employers must amend the plans if they would like them to reimburse employees’ COVID-19 PPE expenses.  The amendment can be adopted retroactively on or before December 31, 2022 for expenses incurred on or after January 1, 2020.  The adoption date must not be later than the last day of the first calendar year beginning after the end of the plan year in which the plan begins reimbursing COVID-19 PPE expenses.  For example, a calendar year health FSA or HRA that begins reimbursing COVID-19 in 2021 would need to adopt the amendment no later than December 31, 2022.

We expect the health FSA vendors and HRA vendors will be providing the option to amend the plan to allow these as eligible expenses in the near future. (Note that no amendment is required to an HSA because those are individually owned accounts, and therefore the ability to reimburse COVID-19 PPE on a tax-free basis applies automatically by virtue of its inclusion under §213(d).)

Postponement of Federal Tax Filing Due Date to May 17, 2021 Allows Additional Time to Make 2020 HSA Contributions

In Notice 2021-21 the IRS recently announced the postponement of the due date for filing federal income tax returns (Form 1040) from April 15, 2021 to May 17, 2021.  The postponement of the tax filing deadlines also automatically postpones to the same date, the deadline for taxpayers to make 2020 contributions into their HSAs.

Participants in a HDHP who were eligible to contribute to the HSA in 2020 are able to make 2020 contributions directly to the HSA vendor (i.e., outside of payroll) by the extended May 17, 2021 tax filing deadline.   Participants can contribute up to the maximum of ,550 for single coverage or ,100 for family coverage (defined as employee +1 other dependent), plus an additional ,000 catch up contribution if they are age 55 by the end of 2020.  Participants would then tax the above-the-line-tax deduction for the contributions when they file their federal income tax return.


Karen Hooper

About the author

Karen Hooper

VP, Senior Compliance Manager

Karen Hooper, CEBS, CMS, Fellow, is a Vice President and Senior Compliance Manager working closely with the Lead Benefit Counsel in Newfront's Employee Benefits division. She works closely with internal staff and clients regarding compliance issues, providing information, education and training.


The information provided is of a general nature and an educational resource. It is not intended to provide advice or address the situation of any particular individual or entity. Any recipient shall be responsible for the use to which it puts this document. Newfront shall have no liability for the information provided. While care has been taken to produce this document, Newfront does not warrant, represent or guarantee the completeness, accuracy, adequacy, or fitness with respect to the information contained in this document. The information provided does not reflect new circumstances, or additional regulatory and legal changes. The issues addressed may have legal, financial, and health implications, and we recommend you speak to your legal, financial, and health advisors before acting on any of the information provided.

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