The Coronavirus Aid, Relief and Economic Security (CARES) Act

March 30, 2020 | COVID-19 Quick Alerts

Trump Signs $2 Trillion Stimulus Bill with Implications for Consumer-Directed Healthcare

On March 27, 2020, President Trump signed into law a $2 trillion bill to address the economic fallout from the COVID-19 pandemic. The Coronavirus Aid, Relief and Economic Security (CARES) Act includes an expansion of unemployment benefits for the record 3.3 million Americans out of a job and the immediate disbursement of $1,200 checks to Americans who earn less than $75,000 in annual income. Billions of dollars in relief will also go toward the healthcare system, state and local governments, and small businesses. Two other provisions will specifically affect the consumer-directed healthcare (CDH) industry.

Over-the-Counter (OTC) Drugs and Menstrual Care Products

The CARES Act states that consumers can purchase OTC drugs and medicines with funds from their health savings account (HSA), flexible spending accounts (FSA) or health reimbursement arrangement (HRA). Consumers may also receive reimbursement for OTC purchases through those accounts. In addition, menstrual products are now considered a qualified medical expense, meaning consumers can pay for or be reimbursed for these products through an HSA, FSA or HRA. This provision is effective for purchases made after December 31, 2019, and for reimbursements of expenses incurred after December 31, 2019. It does not have an expiration date.


The CARES Act states that “telehealth and other remote care services” below the deductible will be permitted in an HSA-compatible high deductible health plan (HDHP). This provision is effective immediately and will expire December 31, 2021. The bill does not specify what “telehealth and other remote care services” entails, but we will provide updates as we learn more. We will keep you informed of any other legislative and regulatory activity relating to the COVID-19 pandemic and CDH.

Impact on HSA,FSA, and HRA Benefit Account

On Friday March 27th the Coronavirus Aid, Relief, and Economic Security Act or the CARES Act was signed into law. The bill included a change impacting the use of funds from HSA, FSA, and in some instances HRA health benefit accounts. The bill reverses the prescription requirement for Over the Counter Drugs (OTC) for reimbursement and also includes eligibility for menstrual care products. The bill had a retroactive start date of 1/1/20. OCA will now be able to manually reimburse OTC drugs when eligible under a member’s HSA, Health FSA and/or HRA benefit account.

Regarding the use of OCA’s debit card and OTC purchases OCA is working with The Special Interest Group for IIAS Standards (SIGIS) who is responsible for the development and management of an industry standard to meet IRS requirements for operating an inventory information approval system (an “IIAS”). Together, we are making changes as quick as possible for future transactions. We expect it will take some time for all the products to be identified and updated in every merchant’s system. The current pandemic will create additional challenges in making that happen. Consumer experience will be inconsistent across items and products in the near future but should improve quickly. SIGIS announced its implementation process and timeline to update the eligible expense list to include OTC expenses as well as menstrual care products. OCA has summarized the SIGIS announcement below.

  • SIGIS is reviewing 19,111 OTC Drugs and Medicines items to include in their database and doing a full review on 913 items in our Feminine Care categories which include Menstrual Care. SIGIS goal is to have all this reviewed and published by 4/15/20.
  • Upon merchants downloading the updated list with revised statuses and processing those changes into their point of sale systems, consumers will be able to proceed through normal checkout lanes and use their OCA healthcare benefit debit cards for the purchase of these products.
  • While the 4/15 list publication will be a significant start, we expect large changes to be published in the following months as merchants and manufacturers submit items not currently in the SIGIS database for eligibility review. There will also be merchant responsibility to ensure their systems get updated with the item revisions.

To view SIGIS formal press release, please click here.

It will be important, that consumers, plan administrators, manufacturers, point of sale vendors and merchants work together and provide mutual understanding while this change gets rolled out.