As part of the recently passed healthcare reform legislation, flexible spending accounts face two changes that will require employers’ attention.
The new healthcare law mandates that beginning in 2011, over-the-counter medications will no longer be eligible expenses unless the employee has a prescription. Further, in 2013 individuals will no longer be permitted to contribute more than $2,500 to a flexible spending account.
Employers will need to work with their spending account administrator to ensure over-the-counter medicines without a prescription are no longer permitted for purchase using debit cards. In addition, employers should begin now to update their plan documents, summary descriptions and any other plan materials to reflect these changes and begin to communicate the changes to employees.
As employers prepare for the new flexible spending contribution limits in 2013, modifications will also be required to the plan documents and their administrative systems. Such changes may involve software changes as well as additional communication to employees.