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The Patient Protection and Affordable Care Act, as amended by
the Health Care and Education Reconciliation Act of 2010
("Affordable Care Act") requires that medicine or drugs
(other than insulin) be prescribed to qualify for reimbursement
under employer provided accident and health plans including a
health flexible spending account, health reimbursement arrangement,
and health savings accounts. Effective January 1, 2011,
over-the-counter (OTC) drugs are no longer reimbursable without a
prescription.
Many plan sponsors amended their cafeteria plan documents at the
end of 2010 to exclude OTC drugs without a prescription from their
plan's definition of reimbursable expenses. However, those plan
sponsors who have not yet amended their cafeteria plans have until
June 30, 2011 to amend the plan to satisfy the new OTC drug
requirements retroactive to January 1, 2011 under a special IRS
transition rule. See IRS Notice 2010-59.
If you have not amended your plan documents to comply with the OTC
drug requirements and need assistance, please contact one of the
attorneys in the Dinsmore & Shohl Compensation and Benefits
Practice Group.
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.
