Health Care Reform and FSA Cards

On March 23, 2010 the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively “the Act”) were signed into law by President Obama. The Act includes a number of modifications to employee benefit programs including a new provision as to what is considered eligible for reimbursement under Section 106 of the Internal Revenue Code of 1986, which affects requirements for transactions conducted with payment cards accessing these funds, by adding the following:

”(f) REIMBURSEMENTS FOR MEDICINE RESTRICTED TO PRESCRIBED DRUGS AND INSULIN.- For purposes of this section and section 105, reimbursement for expenses incurred for a medicine or a drug shall be treated as a reimbursement for medical expenses only if such medicine or drug is a prescribed drug (determined without regard to whether such drug is available without a prescription) or is insulin.”

For Sigis members who are IIAS certified, the significance of the change is represented in its impact to the Eligible Products List (EPL). Under the Act, items such as cough medicines, pain relievers, acid controllers, and diaper rash ointment will no longer be eligible for purchase using FSA or HRA payment cards. Instead, consumers will be required to purchase these items using some other form of payment and then submit a reimbursement request, accompanied by a doctor’s prescription to their health benefit plan. Insulin and other OTC items, such as band-aids, will continue to be eligible without a prescription.

Though the specific list of items affected has not been completely assessed, the following categories of OTC items will require a doctor’s prescription and thus, cannot be purchased using a health care debit card:

• Acid Controllers
• Allergy & Sinus
• Antibiotic Products
• Anti-Diarrheals
• Anti-Gas
• Anti-Itch & Insect Bite
• Anti-parasitic Treatments
• Baby Rash Ointments/Creams
• Cold Sore Remedies
• Cough, Cold & Flu • Digestive Aids
• Feminine Anti-Fungal/Anti-Itch
• Hemorrhoidal Preps
• Laxatives
• Motion Sickness
• Pain Relief
• Respiratory Treatments
• Sleep Aids & Sedatives
• Stomach Remedies

The following are examples of some of the OTC items that will remain available without a doctor’s prescription:

• Band Aids
• Birth Control
• Braces & Supports
• Catheters
• Contact Lens Supplies & Solutions
• Denture Adhesives
• Diagnostic Tests & Monitors • Elastic Bandages & Wraps
• First Aid Supplies
• Insulin & Diabetic Supplies
• Ostomy Products
• Reading Glasses
• Wheelchairs, Walkers, Canes

While many provisions of the Act do not become effective for several years, the change described above becomes effective January 1, 2011. In advance of the effective date, Sigis has and will continue to assess the impact to the EPL, removing items no longer considered eligible under the Act, in order that certified IIAS members can meet the new eligibility criteria.

Should you have any questions please do not hesitate to contact SIGIS at help@sig-is.org or 925-275-6605.

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