In response to the ongoing COVID-19 (coronavirus) pandemic, Congress and the Internal Revenue Service (IRS) have taken some key steps to ease specific concerns about taxes and healthcare benefits. Learn more about the 2020 tax deadline extension, HSA contribution extension, and HDHP updates for coronavirus treatments.
2020 Tax Deadline Extended by 3 Months
The IRS officially extended the tax filing deadline, moving the date from April 15 to July 15, 2020. Tax payers (including individuals, corporations, estates and trusts) now have three additional months to pay what is owed to the agency for 2019. The move also applies to interest and penalties owed.
The Secretary of the Treasury and other officials encourage people to file earlier than the deadline, especially those who are expecting a refund.
2019 HSA Contribution Deadline Extended
Historically, the IRS has allowed HSA owners to make contributions for the previous year up until the tax filing deadline. Due to the 2020 tax deadline extension, HSA owners now have until July 15 to contribute up to their maximum amount ($3,500 for self/$7,000 for family) to their accounts for 2019. HSA owners age 55 and older can make catch-up contributions of $1,000 over their annual maximum.
The IRS has published a list of FAQs; see question 21 for more information about HSA contributions.
Learn more about HSA tax forms here. Contact your HSA benefits administrator or HR department if you need assistance.
HDHP and COVID-19 testing and treatments
Congress has passed legislation on March 13, 2020, stating that testing for COVID-19 is free. It can also cover the costs of a trip to the doctor’s office or emergency room for a test. However, people may still have to pay for the treatment due to individual circumstances.
The IRS has made it easier for people covered by an HSA-eligible high deductible health plan (HDHP). The agency said that high deductible health plans (HDHPs) will not lose their status if they cover the cost of COVID-19 treatments before plan deductibles are met. Also, any costs associated with vaccinations count as preventative care and can be covered by the HDHP. This is important for people under a HSA-eligible HDHP. The IRS will allow their health plan to keep its status, which gives HSA owners the ability to keep making contributions without interruption. Here is list of HSA FAQs.
On March 20, the IRS, the Department of Treasury and the Department of Labor (DOL) announced paid sick leave and child care leave policies due to the coronavirus. You can find more information here. The DOL’s Wage and Hour Division has also published several Families First Coronavirus Response Act Fact Sheets:
- Fact sheet for Employees
- Fact sheet for Employers
- Questions and Answers document
On Friday, March 27, 2020, the CARES Act was passed, allowing OTC medications and menstrual products to be considered eligible expenses for purchase with a Flexible Spending Account (FSA), Health Reimbursement Arrangement (HRA), or HSA. The Cares Act also allows telemedicine costs to be covered under an HDHP without affecting plan status.
DataPath, Inc. creates cloud-based HSA solutions for third party benefits administrators.