The deadline to amend cafeteria plans to address the new
restrictions on the pre-tax reimbursement of over-the-counter drugs
and medicines is almost here!
As a reminder, the Health Care Reform Law (the Patient Protection
and Affordable Care Act and the Health Care and Education
Reconciliation Act of 2010) amended the Internal Revenue Code. For
expenses incurred on or after January 1, 2011, a medicine or drug
is an eligible medical expense only if the medicine or drug: (1)
requires a prescription; (2) is available without a prescription
but the individual has a prescription; or (3) is insulin. This
change applies to health care flexible spending accounts, health
reimbursement accounts, health savings accounts, and Archer medical
savings accounts.
Cafeteria plans with health care flexible spending accounts may
need to be amended to address this limitation. Under IRS Notice
2010-59, any such amendments must be adopted no later than June 30,
2011. Additionally, employers allowing the use of debit cards for
health care flexible spending accounts must address the
substantiation requirements related to this change.
Check your plans now to see if you need an amendment!
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.