Patient Protection, Affordable Care, and Plan Changes

What You Need to Know About the New Year and Over-the-Counter Medications

January 1, 2011 is just around the corner, which means that many aspects of the Patient Protection and Affordable Care Act (PPACA) will take effect. Section 9003 of this legislation amended previous legislated definitions of which over-the-counter (OTC) healthcare expenses are eligible for tax-advantaged benefits plans like Flexible Spending Accounts (FSA), Health Reimbursement Accounts (HRA) and Health Savings Accounts (HSA).

Effective January 1, 2011, FSA, HRA and HSA cannot be used to pay for OTC drugs or medicines without a prescription, or a Letter of Medical Necessity, from a physician, except for insulin. Additionally, the cost of OTC medicines may be reimbursed to employees only when the medicine has been prescribed.

While this change should not be troublesome once the physician community has implemented processes to handle such requests, it could take several months until they are ready.

To help employers plan ahead, I am recommending that employees make advanced purchases of needed OTC medications before December 31, 2010 to avoid frustration and ensure that benefits plan participants are not adversely affected by these changes.

At Visor, we want to keep our clients up-to-date with the latest changes imposed by healthcare reform. If you have any questions or need additional information, please contact my office or visit our Q & A section on Flex Plan changes below.