It’s time to let employees know that many of the purchases they make with FSA or HSA money will no longer be covered next year.
Under the new healthcare reform law, FSA and HSA participants will no longer be able to use their account funds on over-the-counter (OTC) meds unless they have a prescription.
That means in order to get reimbursed by an FSA or HSA for purchasing Tylenol, antihistamines, etc., employees will need a note from their doctor.
However, employees can still be reimbursed for OTC items that aren’t meds — such as bandages, gauze, etc.
Also, in 2011 the penalty on non-qualified withdrawals from HSAs will be bumped up from 10% to 20%.
The new rules and penalties are designed to generate revenue to help fund portions of the new reform law.
During your free trial, you can cancel at any time with a single click on your “Account” page. It’s that easy.
