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Over-the-Counter Drugs? Better Get a Note From Your Doctor
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/
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.
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.
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.
Well Said!
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.
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.
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.
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.
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.
Something seems petty to some people only when it doesn't pertain to them.
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