HEALTH CARE REFORM ACT HAS IMPACT ON FSA AND HRA PLANS
The federal health care reform act that was signed into law in March 2010 will affect many aspects of health care coverage. This includes some changes to employee-sponsored benefit plans such as Flexible Spending Accounts (FSAs), Health Reimbursement Arrangements (HRAs), Health Savings Accounts (HSAs) and Archer Medical Savings Accounts (MSAs).
Specific to the employer-sponsored benefit plans administered by Savers Administrative Services, the new law will have an impact on the design of FSAs and, to a lesser extent, HRAs.
A Prescription to be Required for Over-the-Counter Medications
Starting January 1, 2011, FSA participants will need to pay for over-the-counter medicines using a check, cash, credit card, etc., and then file a reimbursement claim. To be considered for reimbursement, claims for OTC medicines must include a written prescription from a licensed medical practitioner prescribing the item to treat a specific medical condition.
These new OTC rules affect all FSA plans on January 1, 2011, regardless of the plan’s renewal date.
A Prescription and Manual Reimbursement Required for These Items – Effective January 1, 2011, the following categories of items will require a doctor's prescription to be eligible for reimbursement. After January 1, 2011, these items can no longer be purchased using a health care benefit card (“flex card”).
- Acid Controllers
- Allergy and Sinus
- Antibiotic Products
- Anti-Diarrheals
- Anti-Gas
- Anti-Itch and Insect Bite
- Anti-Parasitic Treatments
- Baby Rash Ointments/Creams
- Cold Sore Remedies
- Cough, Cold and Flu
- Digestive Aids
- Feminine Anti-Fungal/Anti-Itch
- Hemorrhoidal Preps
- Laxatives
- Motion Sickness
- Pain Relief
- Respiratory Treatments
- Sleep Aids and Sedatives
- Stomach Remedies
- (This list is subject to change.)
Prescription Not Required for These Items – The following are examples of some of the OTC items that will remain available without a prescription. They can be purchased using a health care benefit card.
- Band Aids
- Birth Control
- Braces and Supports
- Catheters
- Contact Lens Supplies and Solutions
- Denture Adhesives
- Diagnostic Tests and Monitors
- lastic Bandages and Wraps
- First Aid Supplies
- nsulin and Diabetic Supplies
- Ostomy Products
- Reading Glasses
- Wheelchairs, Walkers, Canes
- (This list is subject to change.)
While Savers can’t control the new federal laws that make these changes necessary, we do understand that the new requirements can create an additional burden on many FSA participants. To help ease that burden Savers will continue to provide daily claims processing to ensure that your reimbursement funds arrive quickly and efficiently.
Medical FSA Contributions to be Capped
Currently, the maximum annual salary reduction contribution that an employee may make to a medical FSA is set by the employer sponsoring the plan. Effective January 1, 2013, medical FSA contributions will be capped at $2,500 annually. This amount will be indexed for inflation. Dependent Care Accounts (DCAs) Unchanged
DCAs are currently capped at $5,000 annually. DCA accounts are not affected by the new law, so their annual maximum won't change.
Implementation guidelines on this new legislation are likely to continue to unfold for months - perhaps even years. Savers will monitor guidelines issued by the department of Health and Human Services and the Internal Revenue Service, and will update this as new information becomes available .
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