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Cypress Solution eNews 
January 12, 2011  -  Cypress Benefit Administrators
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We enjoy bringing you information and reminders to help you stay abreast of new Cypress developments and industry compliance requirements. Please let us know how Cypress Solution eNews can be of further service to you.
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debitIRS Modifies Rules on Paying for Over-the-Counter Medications with FSA/HRA Debit Cards
Effective January 1, 2011, the Affordable Care Act requires that individuals obtain a prescription for over-the-counter (OTC) medicines and drugs (other than insulin) in order to receive reimbursement for the cost of the medicine from a health plan. The Internal Revenue Service (IRS) issued Notice 2010-59 in November 2010, which prohibited plans from allowing a health Flexible Spending Account (FSA) or Health Reimbursement Account (HRA) debit card to pay for OTC medicines and drugs, even if the individual has obtained a prescription. 

However, on December 23, 2010, the IRS issued Notice 2011-5, which REVERSED its position on the use of FSA/HRA debit cards to purchase OTC medicines and drugs for which the individual has a prescription within certain guidelines. Read about the specific regulations, FAQs and more.  

If you have any questions or are looking for solutions, please feel free to contact us. We are happy to help!
Cypress Benefit Administrators