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March 26, 2021

Payments for PPE to battle COVID-19 may be made or reimbursed without being included in income

The IRS has announced (Announcement 2021-7) that payments for personal protective equipment (PPE) aimed at preventing the spread of COVID-19 qualify as payments for medical care under IRC Section 213(d). Therefore, these payments qualify as medical expenses that may be paid or reimbursed without being included in gross income under health flexible spending arrangements (health FSAs), Archer medical savings accounts (Archer MSAs), health reimbursement arrangements (HRAs) or health savings accounts (HSAs). The announcement also notifies group health plan administrators that they may make certain plan amendments.