10.27.10
2011 Changes to Savings Plans
People who enjoy the benefits of flex savings accounts (FSAs), health savings accounts (HSAs), and health reimbursement accounts (HRAs) should be aware of two major changes to these plans beginning January 1.
First, employees will no longer be able to use any of these accounts to pay for over-the-counter (OTC) drugs and medicines without a doctor’s prescription. Excluded OTC items include antacids, pain relievers, cold remedies and the like. This also applies to any money left over from 2010 and used for purchases in 2011.
However, funds may continue to be used for a variety of medical items and supplies. These include bandages, contact lenses and cleaning solution, hearing aids and batteries, insulin and diabetes supplies.
A full-color fact sheet, complete with lists of OTC items which do (or do not) require a doctor’s prescription is available online: www.wageworks.com/otcfact.
Finally, the health reform law allows (but does not require) employers to cover an employee’s child up to age 26 in either FSAs or HRAs. However, parents with HSA plans can pay medical expenses for children only if they are tax dependents.
Beginning in 2013, the health reform law will limit the amount of employee contributions to FSAs only. Each employee will not be allowed to put more than $2,500 into their FSA for health care.
From the San Francisco Chronicle, October 7, 2010 issue pp. D1 and D7, and the October 12, 2010 issue pp. D1 and D5, and wageworks.com/otcfact.