CRA reiterates that, during COVID-19, unused HCSA credits can be carried forward for up to an additional 6 months
Members of a health care spending account (“HCSA”) may not be able to use the credits allocated to the HCSA before they expire which, in accordance with IT-529, can generally be carried forward only for a period not exceeding 12 months. CRA has provided a second technical interpretation, similarly worded to the first, indicating that, in this context:
[A]n HCSA that qualifies as a PHSP and which has unused credits expiring between March 15 and December 31, 2020, can temporarily permit the carry forward of those unused credits for a reasonable period to allow plan members to access services that were otherwise restricted during the COVID-19 outbreak. A carry-forward period of up to six months would generally be considered reasonable and would not, in and of itself, disqualify the HCSA from being a [private health services plan].
Neal Armstrong. Summary of 2 June 2020 External T.I. 2020-0847081E5 F under s. 248(1) – private health services plan.