North Raleigh Today

Because of the Coronavirus Aid, Recovery, and Economic Stabilization (CARES) Act, Americans who have employer-provided health insurance or high-deductible health plans can now buy over-the-counter medications with the tax-exempt money in both their flexible spending accounts or health savings accounts, the Carolina Journal reported.

The news agency reported that the COVID-19 pandemic has forced Congress to broaden tax relief benefits for millions and reversed what the Affordable Care Act did when it passed and only allowed Americans to use those savings accounts for prescription medications.

As more than 20% of workers who have insurance through their employers have high-deductible health plans with savings accounts, the change could be a big deal, the news agency reported. Somewhere between 33 and 38 million Americans have health savings accounts, according to Kaiser Family Foundation, the news agency reported.

“This could be a big deal, especially if combined with greater access to drugs,” John Goodman, Independent Institute senior fellow, who was called “the father of HSAs,” told the news agency. “It would be huge if we took full advantage of the opportunity to make a lot of generic prescription drugs over the counter.”

The news agency reported that the Trump administration has instituted a series of reforms for high-deductible health plans, beginning with an executive order last June that made it illegal for high deductible plans to cover low-cost preventative care for those who had chronic health conditions who still hadn't met their deductibles and had the savings accounts.

Goodman told the news agency that either an insurer or the employer could pick up some of that cost so that employees would not lose their savings accounts.

“Waiving the requirement of an across-the-board deductible was a big move. And now that what’s happening with coronavirus is that we’re extending the idea again," Goodman told the news agency.

Also as part of the executive order, Trump raised the $500 cap on unused funds that carry over to the next year and allowed for the savings accounts to pay for primary care and health care sharing ministries, according to the news agency.