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Reminder of Changes Impacting OTC and FSA

IMPORTANT INFORMATION TO PASS ALONG TO YOUR EMPLOYEES REGARDING THE UPCOMING FLEXIBLE SPENDING ACCOUNT (FSA) ENROLLMENT FOR 2011

 

As you may have heard, there is new legislation going into effect on January 1, 2011 which impacts healthcare FSAs. Here's what's happening. Certain over-the-counter items will require a prescription* to be considered an eligible FSA expense. The information below is important for you to know as you begin to think about your healthcare FSA contribution for this year's enrollment.   

 

How does this new legislation impact me?

 

It impacts you two ways:

 

1.            Setting Your Contribution

 

Because some OTC drugs and medicines will require a prescription* beginning January 1, 2011, you might want to consider this when deciding on your healthcare FSA contribution.

 

2.            Using Your Account Dollars

 

Beginning January 1, 2011:

·         Healthcare debit cards, (e.g., PayFlex Card™) cannot be used to purchase OTC drugs and medicines. If a healthcare debit card is used to pay for these items after January 12, 2011, the transaction will be denied at the point-of-sale.

 

·        Certain over-the-counter (OTC) drugs and medicines will be considered ineligible expenses unless you have a prescription from your physician. 

 

OTC Drugs and Medicines Requiring a Prescription starting in 2011

 

Acid Controllers                                                Digestive Aids

Allergy & Sinus                                                 Feminine Anti-Fungal/Anti-Itch

Antibiotic Products                                            Hemorrhoid Preps

Anti-diarrheal                                                     Laxatives

Anti-Gas                                                           Motion Sickness

Anti-Itch & Insect Bite                                        Pain Relief

Anti-Parasitic Treatments                                   Respiratory Treatments

Baby Rash Ointments/Creams                           Sleep Aids & Sedatives

Cold Sore Remedies                                         Stomach Remedies

Cough, Cold & Flu

 

Does this mean all OTC items will be ineligible after January 1, 2011?

No, many OTC items will continue to be considered eligible expenses and will not require a prescription. Contact Omni Resource for a list of "Eligible Healthcare Expenses" for examples or go to https://www.payflex.com/forms/announce/OTC_Participant_Communication.pdf.

 

*Please Note: The documentation required for a prescribed OTC drug or medicine is still being clarified by the IRS. More information will be provided as it becomes available.