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"FSA" Plans Say "No" To Over-the-counter Medications

  Sanjiv Gupta CPA  Published 
"FSA" Plans Say "No" To Over-the-counter Medications

FSA/HSA/HRA Plans Are Changing

Health Industry including Insurance and Laws is rapidly changing. One such change can immediately impact you. 

Starting Jan. 1, 2011,  you can no longer get reimbursement from a Flexible Spending Account (FSA), Health Savings Account (HSA), or Health Reimbursement Account (HRA)  for over-the-counter (OTC) medications.  This is a big change because many consumers were using health savings accounts for generic drugs like allergy medication and other medical supplies.   This change may make you think twice about signing up for such kinds of health saving accounts.  Now you can only seek reimbursements for drugs purchased with a prescription.

In addition to that,  the excise tax for non-qualified HSA withdrawals doubles to 20%. Beginning Jan. 1, 2013, employee contributions to health FSAs will be limited to $2,500 per year, with future increases to allow for inflation.

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