Update on Flexible Spending Accounts and Your Insurance Plan

By: Roberta Rifkin, Vice President, Government Affairs, Independent Health

The recently passed Patient Protection and Affordability Act (PPACA) included several provisions that have already gone into effect, including the extension of benefits for children up to age 26, and the Small Business Health Care Tax Credit. Another provision, which goes into effect on January 1, 2011, will change the way Flexible Spending Accounts (FSA) or Health Reimbursement Accounts (HRA) are used to purchase Over the Counter (OTC) medications and other health care needs.

The FSAs and HRAs were designed to allow consumers to put aside pre-taxable income to pay for medical expenses that are not covered by health insurance, such as prescription drugs, co-pays, and many OTC medications that people use every day, such as cold relievers, headache remedies, and first aid care. After January 1, 2011, people will no longer be allowed to use funds from FSAs/HRAs to buy OTC medications without a prescription.

Below is a list of the commonly purchased items with FSA/HRA accounts that will no longer be covered after the first of the year without a prescription:

Feminine Anti-Fungal/Anti-Itch
Hemorrhoidal Prep
Lactose Intolerance Pills
Laxatives
Motion Sickness
Nasal Sprays
Pain Relief
Respiratory Treatments
Sleep Aids and Sedatives
Stomach Remedies
Toothache Relievers
Wart Removal Medications
Acid Controllers
Acne Medications
Allergy and Sinus
Antibiotic Products
Anti-Diarrhea Medication
Anti-Gas
Anti-Itch and Insect Bite
Anti Parasitic Treatments
Baby Rash Ointments/Creams
Cold Sore Remedies
Cough, Cold and Flu
Digestive Aids

Some items that consumers will still be able to purchase without a prescription include insulin, bandages, contact lens solution, denture bond, eyeglasses, health monitors (blood pressure, blood sugar, cholesterol), and hearing aid batteries.

Members may use their FSA/HRA funds toward OTC products or other covered expenses until December 31, 2010. After that, reimbursement for any OTC medicines will require a receipt and prescription from your doctor.

At Independent Health we're doing our part to help consumers understand the provisions contained in health care reform. For more information on the ACA provisions that become effective this year, visit our Health Reform guide at www.independenthealth.com. For more information on what is and isn't covered under the ACA rules for FSAs/HRAs, visit www.irs.gov and search Over the Counter medicines.