Grow's Lisa Ferber chatted with Lazetta about 3 key takeaways from the CARES Act.
The CARES Act, a $2.2 trillion dollar relief package, passed on March 27, and means that now you can save even more money with your flexible spending account (FSA), health spending account (HSA), or health reimbursement arrangement (HRA). These accounts allow you to set aside specified amounts of pretax money and use it to cover certain health-related expenses. The trouble is, up until now, those expenses have been strictly defined and have come with lots of exceptions. You couldn’t, for example, use your FSA card to buy a pain reliever or a box of tampons at the drugstore. Thanks to the CARES Act, though, some of those rules will change. The changes to tax-related savings programs can help your dollars go further. “What we’re talking about is cash flow, helping people right now,” says Lazetta Rainey-Braxton, co-founder and co-CEO of 2050 Wealth Partners. “Health care is very important. We are hoping the CARES Act removes a barrier to self-care.” Here are three ways that the CARES Act affects your health-related spending and can help you save money.
1. You no longer need prescriptions for some OTC medication
Previously, you needed a prescription if you wanted to buy over-the-counter medications using an HRA, FSA, or HSA. The new law allows you to purchase basic medications without that extra step. “Some of the best OTC drugs, you can get those for a lot less money if you do it OTC than by prescription,” says Steve Neeleman, founder and vice chair of health savings trustee HealthEquity. Braxton says that people are watching to see what they should buy to get them through the pandemic. “Some people don’t like taking meds or don’t want to spend the money on it,” she says. “Tylenol, allergy medicine, that’s now available and less burdensome on individuals. Now, maybe they will feel more inclined if they need it.” The changes regarding OTC medication and menstrual care products are retroactive to January 1, 2020, so you can still submit your receipts and get reimbursed for this calendar year.