REIMBURSEMENT FOR OTCS

REIMBURSEMENT FOR OVER-THE-COUNTER MEDICATIONS IS EASIER THAN EVER

The CARES Act has repealed the ACA prescription requirement for using HSA, FSA and HRA dollars to purchase over-the-counter medication.

Previously, account owners could only be reimbursed for OTC medications if they first acquired a doctor’s prescription. The CARES Act eliminates this requirement, making it much easier to use benefit dollars to pay for everyday qualified expenses.

This is great news amid the COVID-19 pandemic, since it helps people limit the contact they make with others when treating illness. It also reduces overall strain on the healthcare system.

This provision will have a major impact on HSAs, FSAs, and HRAs. Now there’s no need to see a physician in order to use tax-free dollars for things like pain relievers, cough syrup and more.

Similar to the expansion of the qualified medical expenses list, organizations need to communicate these updates so that employees understand their benefits and the best ways to use them. By emphasizing how easy it is to spend and save, organizations can help drive adoption during open enrollment and maximize utilization over time.

In addition, organizations need to be prepared to facilitate the approval of purchases and reimbursement of over-the-counter medicine without a doctor’s prescription. This may require a new training session for your benefits team (as this change has already been implemented at merchants accepting a health care payment card).

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Status

Optional, but highly
recommended*

Source

The CARES Act

Effective timeline

Permanent

*Organizations are free to determine qualified medical expenses for FSAs and HRAs. However, industry-standard lists of qualified medical expenses established through SIGIS have been amended to include these items.

Practically, this means if a debit card is used in conjunction with the organization’s benefit plan, the organization must allow menstrual care products as a qualified medical expense for the cards to continue working.

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