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I was recently informed that the Coronavirus Aid, Relief, and Economic Security (CARES) Act expanded the list of eligible HSA/FSA expenses to include things such as feminine hygiene products and over the counter medications. However, I'm struggling to find a definitive-looking list of what is HSA eligible.

My understanding is that IRS publication 502 contains the list of qualified expenses. However, this is the pre-CARES 2019 list. I see the addition of menstrual care products in sec. 3702 of the text of the CARES act. I'm not immediately seeing the general addition of over-the-counter drugs in there.

SEC. 3702. INCLUSION OF CERTAIN OVER-THE-COUNTER MEDICAL PRODUCTS AS QUALIFIED MEDICAL EXPENSES.

 (a) HSAS.—Section 223(d)(2) of the Internal Revenue Code of 1986 is amended—
  (1) by striking the last sentence of subparagraph (A) and inserting the following: "For purposes of this subparagraph, amounts paid for menstrual care products shall be treated as paid for medical care."; and
  (2) by adding at the end the following new subparagraph: "(D) MENSTRUAL CARE PRODUCT.—For purposes of this paragraph, the term ‘menstrual care product’ means a tampon, pad, liner, cup, sponge, or similar product used by individuals with respect to menstruation or other genital-tract secretions.".
 (b) ARCHER MSAS.—Section 220(d)(2)(A) of such Code is amended by striking the last sentence and inserting the following: "For purposes of this subparagraph, amounts paid for menstrual care products (as defined in section 223(d)(2)(D)) shall be treated as paid for medical care.".
 (c) HEALTH FLEXIBLE SPENDING ARRANGEMENTS AND HEALTH REIMBURSEMENT ARRANGEMENTS.—Section 106 of such Code is amended by striking subsection (f) and inserting the following new subsection:
 "(f) REIMBURSEMENTS FOR MENSTRUAL CARE PRODUCTS.—For purposes of this section and section 105, expenses incurred for menstrual care products (as defined in section 223(d)(2)(D)) shall be treated as incurred for medical care.".
 (d) EFFECTIVE DATES.—
  (1) DISTRIBUTIONS FROM SAVINGS ACCOUNTS.—The amendment made by subsections (a) and (b) shall apply to amounts paid after December 31, 2019.
  (2) REIMBURSEMENTS.—The amendment made by sub- section (c) shall apply to expenses incurred after December 31, 2019.

That said, it is not immediately clear to me whether this constitutes the full and complete list, or whether the CARES act or other legislation has further changes to the list. Further, this requires piecing together data from several sources to come up with the list, rather than a single easy-to-view list of what is eligible.

Is there an official definitive list of eligible expenses? Barring that, is there a non-official source that is highly likely to be correct and up-to-date?

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IRS Publication 502 is the place to get the definitive list; however, it has not yet been updated to reflect the changes that the CARES Act made.

The IRS did publish a news release dated June 17, 2020 which outlines the changes:

Expansion of qualified medical expenses

The CARES Act also modifies the rules that apply to various tax-advantaged accounts (HSAs, Archer MSAs, Health FSAs, and HRAs) so that additional items are "qualified medical expenses" that may be reimbursed from those accounts. Specifically, the cost of menstrual care products is now reimbursable. These products are defined as tampons, pads, liners, cups, sponges or other similar products. In addition, over-the-counter products and medications are now reimbursable without a prescription. The new rules apply to amounts paid after Dec. 31, 2019. Taxpayers should save receipts of their purchases for their records and so that they are able to submit claims for reimbursements.

In short, beginning January 1, 2020, you can use HSA or FSA funds to pay for menstrual care products as well as over-the-counter medications without a prescription.

I'm sure that the next revision of IRS Pub 502 will reflect these changes.

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  • When do revisions to IRS Publication 502 get released?
    – M. Justin
    Nov 12 '20 at 20:07
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    @M.Justin There is no set schedule, but before they release the official version, a draft version is usually available here for review. At this time, I see that they have not yet released a draft for the 2020 version of IRS Pub 502. Nov 12 '20 at 20:10
  • @M.Justin: FWIW my records show 2017 (final) was posted Dec. 05, 2018 was posted following Jan. 10, and 2019 was posted following Jan. 24. But with the disruptions this year there's no reason to think it will be the same as previous years. Nov 13 '20 at 3:23

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