 IRS 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.
|
