PPE Expenses Are Reimbursable Under Health FSAs, HRAs and HSAs

PPE Are Deductible Medical Expenses.

During the COVID-19 pandemic, you may have purchased masks or personal protective equipment (PPE) for the purpose of preventing the spread of the coronavirus (COVID-19). Now, according to a recent announcement from the Internal Revenue Service (IRS), those PPE purchases may be deductible from your income for tax purposes and eligible to be paid or reimbursed under certain savings accounts.

The recent IRS guidance provided that amounts paid by individuals for PPE—including masks, hand sanitizer and sanitizing wipes used for the primary purpose of preventing the spread of COVID-19—are deductible medical expenses. Therefore, the amount you paid for the PPE that is not compensated for by insurance may be deductible as long as your total medical expenses are more than 7.5% of your adjusted gross income (AGI).

Additionally, because purchasing PPE is now considered a medical expense, these amounts are also eligible to be paid or reimbursed under the following savings accounts:

  • Health flexible spending arrangements (FSAs);
  • Archer medical savings accounts (Archer MSAs);
  • Health reimbursement arrangements (HRAs); or
  • Health savings accounts (HSAs).

Please note, if an amount is paid or reimbursed under any of the above accounts, or any other health plan, it will not be considered deductible for tax purposes.

What This Means For Employers

If you have a HSA, FSA, Archer MSA or an HRA, this guidance means you have increased flexibility for health care purchases you’ve made during the COVID-19 pandemic.

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