1/1/11 Prescription required for OTC drugs purchased with FSA funds

[Progressive_In_NC]

http://www.workforce.com/section/news/article/irs-says-flexible-spending-accounts-cant-reimburse-otc-drugs.php

snip:

================================================================
Employees who want to pay for over-the-counter medications using their health care flexible spending account will need a prescription to do so effective January 1, 2011, according to new Internal Revenue Service rules.

The rules issued September 3 involve a section of the health care reform law that sharply restricts FSA reimbursements for over-the-counter medications such as nonprescription pain relievers, cold medicines, antacids and allergy medications.

================================================================

In case anyone missed this....FYI.

================================================================

The health care reform law’s restrictions on reimbursing over-the-counter expenses from FSAs is the first of two major provisions affecting FSAs to take effect. The other provision will cap pretax contributions to FSAs at $2,500 effective January 1, 2013.

================================================================

[alc]

1. was there any intent to reduce health CARE costs in the insurance reform bill?

They are requiring us to have a doctor's visit in order to use our own money to buy otc medicine that we've always used without the doctor's visit.

And insurers will be happy to pay for that doctor's visit because it increases the cost of medical care. Premiums can be 15-20% more than medical costs, so the way to increase profit is by increasing medical costs.

[piratefish08]

2. my wife and I were just discussing whether to increase our FSA for next year.

I guess this gives us the answer.

not to mention a 25% increase in our HI premiums. our deductible went up too.


yeah, yeah, I know. just wait until 2014.

[Statistical]

7. It was/is a scam. A way to pad the numbers.

Remember how they said HCR will only cost $x over 10 years. Crippling HSA/FSA accounts is a way to get to that $x.

As HSA/FSA are less useful people will use them less and as a result pay more taxes and that "brings down" the cost of HCR.

Got to love Congressional math.

[aikoaiko]

3. I do not understand why this reform is trying to dessimate FSAs.

Being able to spend pre-tax money on health care has been super valuable to me. I max out my FSA and its all spent by August and sometimes as early as May.

Maxing out my FSA gave me more than an extra $1000 to spend on health care.

[Progressive_In_NC]

4. The intent was to provide more taxable income to offset other costs in HCR

if you take $1500.00 out of FSAs and restrict what you can buy with it, that money and other money becomes taxable.

I think they missed the mark slightly, however.

[aikoaiko]

9. I understand the need to generate revenue, but why target the money already spent on health care?

:shrug:

I don't think a lot of people know this is coming and it will anger people in 2013.

I work at a university where a lot of people use their FSA money to pay for childcare. They won't be happy to find out the new limits which will mean up paying around %25 more out of pocket.

It astounds me that they are fucking up a good thing that almost everyone likes.

[Statistical]

10. It was a hidden way to raise taxes without raising taxes.

A minority of people use FSA/HSA.

Sneaky + minority punishment = popular w/ Congress.

Don't get me wrong I am 100% against it, and I think it is stupid (me going to Dr to get a script is going to LOWER healthcare) however at the same time I can see why they did it.

They needed for HCR to not (at least on paper) increase deficit. Forcing people out of HSA/FSA is one way to increase revenue and reduce the net cost.

Sure they could have done the same thing by raising taxes but that would have been obvious. This is a stealth tax.

The story has sunk like a stone and only got +4. Seems like the strategy worked.

[Nite Owl]

5. They intended to reduce costs of

healthcare but it wasn't for us. We all just assumed that we would be in on the savings but it was government spending and health insurance companies that get it.

[Statistical]

6. and HSA funds. I am buying a 18 month supply of Zertec in December.

Thank god the HCR is making health care "affordable". :rofl:

[Lance_Boyle]

8. I posted about this when I got notice from my employer a few months back.

The DU consensus at the time was "shut up whiner, and pay your taxes on your OTC meds like everyone else!"

The only reason for this change, as far as I can tell, is that it will make it much more difficult to blow through any leftover reimbursement account funds at the end of the term than it is now. Currently if I have $50 left over I can run to the pharmacy and stock up on Nyquil and Zyrtec (but not Sudafed - my state considers it to be pre-meth and restricts sales). Under the new law, I will have to use 20 of those leftover dollars to fund a copay to get my Primary Care doc to write me a script for these OTC drugs, then spend the remaining $30 as before. Except that I won't be able to charge it on the card - I will have to pay cash out of pocket and then submit for reimbursement. Most likely the law was written with the understanding that not many people will take these extra steps, so the company managing the reimbursement account gets to keep the leftovers to itself. Bastards.

[Lisa0825]

11. I canceled my account because my plan will no longer allow me to buy OTC stuff at all.

Which would make it next to impossible to finish off any balance left at the end of the year.