Less-flexible FSAs: What’s on tap for 2012
November 2, 2011 by Christian SchappelPosted in: Employment law, Health care, Money, Pay and benefits, Special Report, Special Report - Benefits
As open enrollment comes to a close, it’s become clear that flexible spending accounts (FSAs) have lost their luster thanks to the healthcare reform law. But hope is here for those longing for the good old days of the FSA.
One mandate in the healthcare reform law says expenses for over-the-counter (OTC) drugs that aren’t prescribed by a doctor (except insulin) can’t be reimbursed using funds from:
- Flexible spending arrangements (FSAs)
- Health reimbursement arrangements (HRAs)
- Health savings accounts (HSAs), and
- Archer medical savings accounts (MSAs).
The mandate has proven to be a huge hassle for many individuals and pharmacies.
The inconvenience of having to visit a doctor before picking up OTC meds has left fewer health plan participants wanting to use FSA accounts, and the increased paperwork has left some pharmacies unwilling to fill OTC meds paid for out of FSA accounts, according to a report by The Wall Street Journal.
What’s ahead
Many organizations are planning changes in 2012 in an attempt to bring some of the luster back to FSAs.
For example: The Wall Street Journal report says some third-party administrators of FSAs are starting to offer a form that allows doctors to list all the OTC meds a patient would need throughout the year.
An FSA participant would then only have to visit their doctor once a year to obtain the OTC meds he/she needs.
It’s worth checking to see if your administrator offers this “master prescription” form and, if it does, presenting that info to your employees this enrollment season.
Some doctor’s offices are also providing the form, so encourage your workers to ask around.
Restrictions to get thrown out?
2012 could also bring about major legislative change that could get the new OTC restrictions repealed.
Six pieces of legislation have already been introduced between the House and Senate that would roll back the requirement that FSA participants obtain a doctor’s prescription for OTC medicine reimbursement.
Would you like to see the FSA restrictions repealed? Share your opinions in the Reply box below.
Tags: flexible spending accounts, fsa, healthcare reform, mandate, master prescription, OTC
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November 3rd, 2011 at 2:22 pm
I would love to see this repealed….not only for FSA’s but for HSA and HRA as well. No one has stopped using any of these plans due to the fact that OTC medicines are not covered, but it sure helps their wallets if they could still do this. If the govenment wants to help, why do they keep taking things away that help the public?
November 8th, 2011 at 5:09 pm
I would be thrilled if the OTC restriction was lifted. Many of my employees were reluctant to use the FSA benefit in years past. The “selling point” for that was that OTCs could be purchased from the account as well. Very few individuals qualify for the medical deduction, if they can even itemize their tax returns. This was one small way to benefit taxpayers, sacrificed in the name of reform.
December 13th, 2011 at 9:50 am
I use two prescription meds for my cholesterol and also some supplements. It would be great if
we could once again use our HSA to help pay for the supplements as well. Very few people are
able to itemize their health care expense and this would help many who struggle each month with
medical bills. I agree, it seems the government keeps cutting back for the average American but
just take a look at the health care plan our Congress people have in place for themselves.