Important Information – Effective 1/1/11:

New legislation on over-the-counter purchases using FSA, HSA or HRA accounts.

The recently enacted Patient Protection and Affordable Care Act of 2010 changes the rules for the purchase of over-the-counter (OTC) products.

5 OTC changes for employers and employees to know:

1.  Employees with an FSA, HRA, or HSA can no longer use their account funds to purchase OTC drugs and medicines (e.g. Advil, ibuprofen, cough syrup) unless they have a Note of Medical Necessity (NMN) or a prescription from their doctor.
2. If an employee has an NMN or a prescription for an OTC drug or medicine, they must pay at the point of service and submit a manual claim for reimbursement.
3. Employees can continue to use their FSA, HRA and HSA funds to purchase OTC items that are not considered a drug or a medicine (e.g. bandages, wound care, contact lens solution). Benefits cards can continue to be used for these purchases.
4. If an employee has questions about this OTC change or needs more information, they should call their Plan Administrator at the number on the back of their Card.
5. Employees should consider the new OTC rules when estimating the amount to put in their FSAs, HRAs or HSAs for the next plan year.