Call 866-340-2247 today to Request a Quote 

Blog

Bill Would Reverse Ban on Using FSAs, HSAs for Over-the-counter Meds


Legislation in Congress would reverse a controversial portion of the Affordable Care Act that bars employees from tapping their flexible spending accounts, health savings accounts and health reimbursement arrangements to pay for over-the-counter medications.
The ACA barred the practice of spending funds that had been set aside using pre-tax dollars to spend on medications that can be purchased without a prescription.
HR 1270 was introduced last year to remedy what bill sponsor Rep. Lynn Jenkins (R-Kansas) says has resulted in patients having to spend more money than necessary.
That ban is resulting in “families spending more money to see their doctor to get basic over-the-counter medication, and doctors spending valuable time prescribing cold medicine as their more critical patients wait for attention,” Jenkins said at a press briefing on the bill.
HR 1270 was passed out of the House or Representatives on a 243-64 vote and is currently awaiting action in the Senate.
In particular, the measure repeals provisions of the Internal Revenue Code, added by the ACA, that limit payments for medications from health savings accounts, medical savings accounts, and health flexible spending arrangements to only prescription drugs or insulin.
In other words, your employees cannot use the funds in these accounts to pay for over-the-counter medications unless they first obtain a prescription. The only exception is insulin.
If passed, the bill would be retroactive to Jan. 1, 2016 to allow workers who have such medical expense savings accounts to use them for over-the-counter medications like allergy pills and cold treatments.