The Internal Revenue Service issued its annual inflation adjustment Wednesday for health savings accounts for 2021, at a time when many taxpayers are worried about their health in the midst of the novel coronavirus pandemic.

In Revenue Procedure 2020-32, the IRS said for calendar year 2021, the annual limitation on deductions for an individual with self-only coverage under a high deductible health plan is $3,600. That’s up from $3,500 this year (see our story).

For 2021, the annual limitation on deductions for an individual with family coverage under a high deductible health plan is $7,200, up from $7,100 in 2020.

For 2021, a “high deductible health plan” is defined as a health plan with an annual deductible that is not less than $1,400 for self-only coverage or $2,800 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $7,000 for self-only coverage or $14,000 for family coverage (this year, it can’t exceed $6,900 for self-only coverage or $13,800 for family coverage).

In March, in response to the coronavirus crisis, the IRS said high-deductible health plans can now cover the costs of COVID-19 testing and treatment before the plan deductible is met (see our story).

As part of the CARES Act that was signed into law at the end of March, Congress is also now allowing people to use an HSA or a flexible spending account to pay for over-the-counter drugs and medicine, such as allergy medications and pain relievers, without a doctor’s prescription. That reverses a provision of the Affordable Care Act that required a prescription for such purchases. The CARES Act also allows the use of HSAs for telehealth and other remote care services until Dec. 31, 2021.