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Recent Change For OTC Medications
OTC Medications and Drugs No Longer Reimbursable Without a Prescription
In March 2010, Congress passed the Patient Protection and Affordable Care Act (“PPACA”). The new law requires a prescription for FSA reimbursement of over-the-counter medications and drugs (including Tylenol, Advil, Claritin, and cough medicines). The change took effect on January 1, 2011 for all plans, regardless of plan year basis. Please be mindful of this as your current plan year is ending and as a new plan year begins.
While we as participants certainly enjoyed having over-the-counter drugs reimbursable through our Health FSAs, the statistics have shown that over-the-counter drugs represented a very small percentage of reimbursements. Thus, even with the new change, the Health FSA remains a significant and effective tool for employees to save valuable tax dollars on their out-of-pocket medical expenses.
Note:
- The new rule does not affect non-drug over-the-counter items or insulin, all of which are still fully reimbursable without a prescription. The non-drug over-the-counter items still reimbursable without a prescription include bandages, contact lens, diagnostic devices, and many others.
Frequently Asked Questions:
You should provide (1) a copy of the prescription, (2) receipt or valid documentation for the over-the-counter item(s) purchased, and (3) a properly completed Claim Form.
If my plan offers the Flex Card, can I still use the Flex Card to purchase over-the-counter drugs?
No. On January 1, 2011, Flex Card and related systems were reprogrammed so that the card can no longer be used to purchase over-the-counter medicines or drugs. The Flex Card remains available for use at all merchants for other eligible items (including non-drug over-the-counter items).
How does this change affect over-the-counter medical devices and supplies?
As noted above, the new rule does not apply to items for medical care that are not medicines or drugs. Thus, medical items, supplies, and equipment that are available over-the-counter and are not drugs continue to qualify for reimbursement without a prescription. These items include, but are not limited to, crutches, bandages, contact lens, diagnostic devices, and many others.
Absolutely. The change to over-the-counter drugs is the only change that affected Health FSAs on January 1, 2011. All other eligible Health FSA expenses continue to be fully reimbursable. There was no change affecting prescription drugs, co-pays, deductibles, or dental or vision expenses.
If you have further questions about what expenses are eligible for reimbursement by the Health FSA or how this change affects you, you may contact us at any time.