Coins and pill bottle floating on a pink background.

The Coronavirus and Your HSA

What you need to know to navigate the coronavirus pandemic when you have an HDHP with an HSA.

We spend a lot of time talking about the long-term value of having a health savings account (HSA). But the COVID-19 pandemic reminds us of how important it is to understand how your high-deductible health plan (HDHP) with an HSA can be used for your immediate needs. With governments and health insurance companies scrambling to respond with new policies, it’s extra-important to stay on top of all the changes.

That’s what we’re going to do right now.

Note: The questions and answers listed here are focused on HSAs and HSA-eligible HDHPs. If your plan is not an HSA-eligible HDHP, we strongly recommend calling your health insurance company to get more information on their COVID-19 coverage. If you get your insurance through your employer, check with your benefits or HR manager.

Can I pay for COVID-19 testing and treatment with my HSA?

Yes, absolutely. HDHPs with HSAs were designed to help you save on insurance costs (monthly premiums) while also being able to save tax-free for unforeseen medical costs. But before you pay for coronavirus-related expenses from of your HSA, make sure that your health insurance isn’t already covering those costs. Insurance plans and state and federal governments are taking quick action to address the pandemic, and your plan coverage has probably already changed and may change again…which we cover next.

Does my HDHP cover COVID-19 testing before I meet my deductible?

The IRS recently cleared the way for insurers to cover COVID-19 expenses before you meet your plan’s deductible. Additionally, numerous states have mandated that health insurance, including HDHPs, cover all costs for testing and potentially treatment (here is a state-by-state list of COVID-19 policy updates from Kaiser Health News) of the coronavirus. 

But—and this is important—unless a state has mandated that your insurance cover your costs, it doesn’t necessarily mean they will. Always check with your insurance provider (or your employer’s benefits/HR manager) to get details specific to your plan. Since everyone is curious right now and call wait times are high, you may want to start by going to your insurance company’s website and seeing if they have posted information on coverage updates, or if you can sign up for email updates.

What are my options for seeing a doctor or other medical professional?

First and foremost, if you feel that you have COVID-19 symptoms and you have a primary care physician, start by calling them. We’re here to help you make the most of your HSA but we are not medical professionals, so always start by asking a pro! If you do not have a primary care physician, luckily new regulations have expanded the availability of telemedicine, as well as HSA eligibility for telemedicine subscription services like Teladoc. What this means is that you can now consult online (usually through video chat) with a doctor anywhere in the country, not just a doctor in your own state or region. It also helps keep you away from medical facilities with those that are already infected—and keeps those medical facilities clear of people who may not be ready for treatment.

Starship partner Carbon Health has a free symptom checker and is also providing patients with free video consultations, no matter where you are in the country. Visit Carbon Health [link] for more info.

Again, check with your health insurance provider to see if they have any existing telemedicine arrangements that will help you.

What other COVID-19-related products and services can I pay for with my HSA?

Lots. You can pay for thermometers, nebulizers, zinc lozenges, and much more. The HSA Store has a “Virus Preparedness” section for products to help you treat and prevent common viruses (this section refers to general virus preparedness and treatment, not specifically for COVID-19). Plus, currently, a portion of sales is donated to the CDC Foundation.

But there are some notable items you’ve been hearing a lot about lately that are not HSA-eligible expenses—hand sanitizer and masks. And, of course, toilet paper.

What if I need my HSA funds for other expenses?

The money in your HSA is always yours. So if you have a non-medical emergency need, whatever it might be, you can withdraw your HSA funds to pay for it. But anything you pay for that’s not a qualified medical expense will mean you have to pay a tax penalty. 

But something else to keep in mind…The CARES Act has made it possible for you to withdraw funds from a 401(k) or IRA without incurring the normal early-withdrawal penalty. So if you have an emergency need and have a retirement account, you’re better taking the funds from there than your HSA—though you should do everything you can to avoid dipping into any long-term, tax-advantaged account right now.

Should I be contributing to my HSA right now?

If you have the money, then yes. Along with extending the 2019 tax-filing deadline, the IRS also gave us 90 days more to get to our 2019 limit on HSA contributions. That means an extra three months to increase your annual tax deduction while saving for the future—or for medical expenses more immediately.

Additionally, many financial experts advise that a bear market can be a good time for long-term investors to make investments in index and mutual funds because, over time, the market has always increased. You should always consult with a licensed financial advisor to see if this or any other strategy is right for you, but we wanted to give you something to think about.

It goes without saying that what we’re seeing is unprecedented in all of our lifetimes. National, state and local governments are taking action to protect us, companies are rapidly changing their business plans and policies, and we’re all taking major precautions to protect ourselves and our loved ones. And we will continue to update you as we know more about possible updates to HSAs and how they will help you and all of us get through this, together.