Reimbursement Rules are Changing for Over-The-Counter Drugs

As of January, 1, 2011 rules are changing for over-the-counter drugs eligible for reimbursement under Flexible Spending Accounts (FSA), Health Care Reimbursement Accounts (HRA) and Healthcare Spending Accounts (HSA).

It is especially important to alert employees now as they calculate their spending account dollars for 2011. The IRS changed the rules for reimbursement in conjunction with Patient Protection and Affordable Care Act (PPACA) enacted this year.

Over-the-counter (OTC) drugs like aspirin, pain relievers, decongestants, cough drops and cough suppressants will no longer be eligible for reimbursement after January 1, without a prescription. Costs for over the counter prescription drugs purchased in 2010 cannot be carried over into 2011.

Employees need to obtain a written prescription from their physician to seek reimbursement for an over-the-counter product to substantiate a claim.

Other non-prescription products including contact lens solutions, crutches, blood pressure monitors, bandages, thermometers, first aid kits, blood sugar test kits and insulin are still considered eligible expenses.

If you have any questions about the new over-the-counter regulations or if you want to find out how FSA, HRA or HSA plans can work with your current benefit offerings, contact The Starr Group.

Links:
www.irs.gov/pub/irs-drop/n-10-59.pdf