Over-the-Counter Drugs? Better Get a Note From Your Doctor

[Sarajmt]

New Rules Coming for Payments Out of Health Savings Accounts

Published October 15, 2010 | FoxNews.com


Under the new health care law, consumers using workplace pre-tax health savings accounts will soon need a doctor's note to pay for Tylenol and an estimated 15,000 other over-the-counter drugs.

Starting Jan. 1, employees who use flexible spending accounts (FSAs), health saving accounts (HSAs), or health reimbursement arrangements (HRAs) to pay for common medications such as pain relievers, cold medicines, antacids and allergy medications will need prescriptions. The new rules don't apply to insulin.

The new rules will also prohibit the use of FSA or HRA debit cards provided by administrative plans for over-the-counter purchases, because the IRS says there's no way to prove the drugs were prescribed.

The IRS says any money removed from HSA accounts to pay for medical expenses bought without a prescription will be included as taxable income and subject to an additional tax of 20 percent.

Robert Zirkelbach, a spokesman for America's Health Insurance Plans, the industry lobby that voiced support for the overhaul but has been accused by some of the law's proponents of trying to undermine it, said the law creates "unintended consequences."

"It creates unnecessary hassles for consumers and provides the wrong kind of incentives," Zirkelbach said, adding that the changes could make it more difficult for consumers to get medicines they need at costs they can afford.  

"This change could have the unintended consequence of increasing health care costs," he said. It might provide an incentive for consumers to go back on more expensive medications when over-the-counter medicine works just fine."

More than 10 million consumers use HSAs, according to a survey done in January by AHIP. That's up from 8 million in 2009 and 6.1 million in 2008.

According to an analysis by benefits administrator Aon Hewitt of more than 220 employers covering more than 6 million workers, 20 percent of employees, or 1.2 million, contributed to an FSA in 2010. Of those workers, the average annual contribution is $1,441.

FSAs and HSAs allow workers to reduce their taxable income to pay for qualified health care or child care expenses. Anyone with a high-deductible medical insurance plan can obtain an HSA. The IRS defined a high-deductible plan in 2010 as $1,200 a year for individuals and $2,400 for families.

FSAs, which were first authorized by Congress in 1978, are only available through employers who offer the plans. But FSAs face another new rule under the Affordable Care Act -- a limit on the pre-tax contributions to $2,500, starting Jan. 1, 2013. There is currently no limit on how much an employee can contribute to FSAs, although employers can impose one.

Lawmakers imposed the cap to help pay for provisions that will expand coverage starting in 2014. The cap is expected to raise $13 billion for other government-provided health care services offered between 2013 and 2019.


URL

http://www.foxnews.com/politics/2010/10/15/new-health-care-rules-require-doctors-note-pay-otc-drugs-fsas/

[specialmom]

Welcome,  and I meant teeth whitening not cleaning.  A bit different.  lol

[adgal]

Ok, I think I am better understanding this now.  It is something I had never heard of, so I was super confused.  Thanks!!!

[specialmom]

I wanted to clarify that it is used for things insurance does not cover.  So my son's occupational therapy is not covered under our insurance so we pay out of pocket.  We pay each week he attends a payment from our own account.  Then our flexible spending account manager cuts a check back to us.  Other people have debit cards that they can use instead of the check back process we have.  But it is for things your insurance won't cover.  The only reason you use it is for the pretax savings.  The money you put into flexible spending comes right out of your pay check tax free and put into the account.  Then taxes come out of the rest of your paycheck.  

[specialmom]

Well, there is a guideline for it but it is not mandating by the insurance company we use.  It is a government guideline as this is money that is not taxed.  Teeth cleaning is not included, for example.  It is a luxery to have white teeth or something.  But other dental procedures would qualify to use the money for it.   The insurance company has nothing to do with what qualifies and what doesn't.

[adgal]

Ok, so this particular piece of it aside (meaning the over the counter meds), I still have to ask...does not the Insurance company you are covered by not control your options?  I am trying really hard to understand this, and am soooo confused..lol.

Is it the fact that its' the gov't involved, or is it more control in general your opposed to.  Because from where I sit, it would seem to me that your current system has far more control, just coming from a different place.  It seems the Insurance companies sort of dictate everything.  Again, I know we always only hear worst case scenarios, so am genuinely interested.  Don't they tell you who to see, what hospital to go to, what you can have for tests, etc?  

[Sarajmt]

More rules.  More regulations.  More Cost.  More Bureaucracy = Less money in my pocket.  Less control over my life.  More Government intervention in my life.

I don't like it!!

[specialmom]

Yeah?  I get that.  I use over the counter allergy medicine which if I weren't over the limit on my flexible spending account due to a chronic issue with my child that requires out of pocket spending . . . I'd be able to use my flexible spending account.  Now I would have to see my doctor to do so.  Costs me more.  Or not use my FSA account for the allergy pills and lose the benefit of the FSA tax savings.  Costs me more.  Costs me more is the theme.  Yuck.  

[teko]

Flexible Spending Accounts (FSA)

Some employers offer flexible spending accounts that allow you to set aside part of your salary — before it is taxed — to help pay for some of your medical expenses. Starting in 2013, $2,500 will be the most you can contribute to an FSA. (That limit will be increased in future years to stay in line with cost-of-living increases.) Beginning in 2011 you will not receive FSA reimbursements for over-the-counter medications, such as aspirin or cough-and-cold medications, unless they are prescribed by your doctor.

This is the new law in a nutshell.

[Sarajmt]

Well Said!  

[specialmom]

No.  We set aside money each year before the year starts for any medical expenses not covered by insurance.  It is our own money and it is taken out of paychecks without being taxed and can ONLY be used for medical needs.  It covered things like over the counter meds, glasses, occupational therapy for a child when insurance doesn't pay for it (as in us), co pays can be paid out of it.  It is a way to plan ahead for your medical needs for the upcoming year.  The year I had kids, we put more in for the expenses of it although they do have a cap as to how much you can put in.  We do the maximum and still deplete the account by the end of the year because of my son's health issues.  

So say that my son has a cough.  Well, sure------------ I can go out and buy the darn cough syrup.  No problem.  But if I want to take advantage of the pretax flexible spending account---------  I can't do that anymore unless I've seen a doctor and have a note saying it counts.  Now, my kids are 5 and 6 and I'm good at spotting a plain old virus that does not require a doctor's visit.  Now, if I'm counting on my medical expenses out of pocket to be paid via flexible spending----------  I'd have to see a doctor to get their permission.  

In essence, the government is taking away the right to use our money as we choose and yes, we can get the cough medicine without a doctors note and not use flexible spending-------- but they keep the tax savings we had on it.  OR we can go to a doctor and pay a copay.  

So-----------  it does change things and costs more money either way you look at it. And it is all the little ways that this health care bill add up to cost Joe Shmo like me more money that concerns a lot of people.  

[adgal]

I don't really understand the loss of control issue.  I find that argument a bit confusing (no disrespect intended here, I really do).  The way it sits now, doesn't the insurance company have all the control?  Now I know that we all only really hear the horror stories, but I know on the Pregnancy forums I hear a lot about Insurance Companies only paying for a certain amount of tests (ie: ultrasounds, etc.).  I also hear about many of them not covering childbirth.  I am told that many insurance companies have a list of 'approved" Dr's. which are the only ones you can see.  So really, under the current system, (if this is all true), isn't it the Insurance Companies controlling your system?  I hear that you don't want the gov't controlling it and I can understand that, but honestly, here the gov't really doesn't interfer at all.  

I think this is what has confused me with the oppositition to the change the entire time.  I don't understand how having an Insurance Company that is strictly for profit is better, I really don't.

[specialmom]

And really as I sit here and think about this---------  yes.  They are taking away some control.  This bill puts a qualifyer on how people can use their own money/flexible spending accounts.  That is a loss of control.  

Something seems petty to some people only when it doesn't pertain to them.

[specialmom]

And NOW I would have to make a doctor's appointment in order to buy the allergy medication that I was able to do without supervision before and use my flexible spending acount.  So it increases my costs in that I have a doctor's bill as well.  So, yes----------- so do I have a choice in spending more money next year for the same thing I do now?

[specialmom]

Well, Mary----------- I believe that everyone has a right to be concerned with what they choose and no one is a dictator of what is worth of discussion.  It is an aspect of the health care bill that is undesirable to some.  

If someone can't work due to a medical condition they have the option of applying for social security.

[Ashelen]

sorry I don't know why I said "people without insurance"  I meant to say "the people without transportation or money to see their doctors" because just because you have insurance doesn't mean you can afford all the services involved.

[Ashelen]

well....what about the people without insurance or money who can't see a doctor to get the note? a lot of people survive using OTC meds because they CAN'T go to see a doctor to get a note...so they make do with what they can get. maybe I'm not understanding the bill right, but it just seems...pointless?

[allaboutmary]

I understand how a flexible spending account works. You have not lost any choice. You can choose not to put your allergey medication money in that account or you can get a script from your doctor.  This just seems like a very petty discussion with the millions of people going without medication (in the greatest country in the world).  It just seems like more petty spin against the new healthcare.  I know the left does it too.  It's up to all of us to get past the stupid stuff and get to what's really important.

[specialmom]

And Mary, I also wanted to say that I do feel for people that are struggling and have few options.

[specialmom]

Mary, it isn't that over the counter meds are covered under any type of plan--------- it is that people set up flexible spending accounts that is their OWN money to spend on health care expenses which included say if you had allergies and bought over the counter meds to treat it.  You would use your own flexible spending account that you put the money into to be drawn out when you need it.  So what this is about is that unless you have a doctors order to go get those OTC meds it would not qualify for your flexible spending dollars as they do now.  
Another way of taking "choice" away from us.

[allaboutmary]

I think it's pretty sad that people complain about having to pay for over the counter meds (actually they don't have to pay, just get a doctors note). So many people in this country can't afford life saving prescription medication. I had health insurance my whole life and they never paid for over the counter meds, so what's the big deal about this now.  I mean really.............you have people out there that worked their whole lives that will die this year because they can't get the treatment they need.  Some people should really be counting their blessings.

[Ashelen]

LOL Kay I wasn't offended please don't think I was! I was just being cheeky :)

[teko]

I think the age of 26 was put in there for the purpose of young people going thru college. A whole lot of them still do pay their own way by working in order to do it. Not everyone has a mom or a dad that puts them thru school. I think the age is good for college students.

[specialmom]

I was JOKING!  I think college campuses have the reputation of being pretty liberal so Democrats would WANT them to vote but that was just part of my little funny which you didn't think was too funny.  . /And any comment made about their not being being able to vote had to do with thinking they still need mommy and daddy to cover their expenses at age 26.   If they are not adult enough to do that . . . are they adult enough to vote.  More of the joke that isn't funny.  sorry.  And see, you are 25, living as a grown up with a husband and children . . .  you act like an adult and your government should treat you as such.  Okay, hope I made that all better.  (smile).  

[Ashelen]

Well now that's not fair! After all, I'm only 25! ;)

But don't you think that the young vote is vital? I think that older people very often dismiss younger people because we don't have experience, or life-gained wisdom...but, truthfully, not to be harsh...we're really the ones that matter because sooner than later...the oldest votes (not including anyone here!) will be, quite literally, dead and gone...and our opinions are the ones that are going to shape the future. Really need to stop ignoring the younger voters, IMO. And by that I  mean....targeting us JUST to get our votes is not the right way...how about actually respecting the future of America enough to DISCUSS HONESTLY the issues and help us come into the political scene?


at any rate, making OTC medications require a prescription is beyond ridiculous. that's the point of "OTC".....I can't believe how completely a$$-backwards this bill makes things.