ARPA - Update on PPE and COBRA Subsidy
IRS Announce COVID-19 Related PPE Qualify as Medical Care Expenses
The IRS has announced that amounts paid for personal protective equipment (PPE) for the primary purpose of preventing the spread of COVID-19 (such as masks, hand sanitizer and sanitizing wipes) are treated as amounts paid for medical care under § 213(d) of the Internal Revenue Code (Code) if purchased by an individual for personal use (or by that individual’s spouse or dependents for personal use).
This announcement means COVID-19 PPE expenses are eligible for reimbursement from health FSAs, HRAs, and HSAs. Expenses that are not reimbursed under one of these arrangements, or other health plan, are deductible for federal income tax purposes if the taxpayer’s total unreimbursed medical expenses exceed 7.5 percent of adjusted gross income.
If PBA administers your Medical FSA, your Plan Document automatically allows reimbursement of qualified medical care expenses (as defined in Code § 213(d)). Therefore, an Amendment is not required to allow these additional expenses.
American Rescue Plan – COBRA Premium Subsidy
On March 11, 2021, President Biden signed The American Rescue Plan Act of 2021 (ARPA). The new law created a 100% COBRA premium subsidy and additional COBRA enrollment rights for certain employees and their families. A summary of the ARPA COBRA subsidy requirements was sent to you on March 19th.
ARPA requires the Department of Labor to release Model Notices by April 11th.
PBA is continuing to monitor developments and will provide you with updated guidance when information becomes available.
Please contact your PBA Flex/Enrollment Representative at 800-435-5694 if you have any questions.