Although the 2011 expense period for your Health Reimbursement Account, Flexible Spending Account or Health Savings Account is half over, we wanted to remind you that Health Care Reform provisions in 2010 changed some of the rules, and since the additional tax on distributions that don’t qualify has increased to 20 percent in 2011, it is more important than ever to understand what expenses are eligible.
2011 Health Savings Account Changes
Beginning January 1, 2011, you can no longer use health spending accounts for over-the-counter drugs and medicines, unless you have a prescription. However, you don’t need a prescription for insulin or diabetic supplies. To be reimbursed for eligible healthcare expenses through your HRA or FSA, you’ll need to submit your doctor’s prescription and your store receipt. To use a HAS to purchase over-the-counter medicine, you should keep a copy of your prescription and store receipt in case of an IRS audit.
Over The Counter Drugs Requiring a Prescription
The following medicines require a prescription if purchased after January 1, 2011:
- Acid controllers
- Allergy and sinus
- Antibiotic products
- Anti-diarrheals
- Anti-gas
- Anti-itch and insect bite
- Anti-parasitic treatments
- Baby rash creams
- Cold sore remedies
- Cough, cold and flu
- Digestive aids
- Feminine anti-fungal/anti-itch
- Hemorrhoid treatments
- Laxatives
- Motion sickness
- Pain relief
- Respiratory treatments
- Sleep aids and sedatives
- Stomach remedies
Over The Counter Medicine Not Requiring Prescription
Although over-the-counter medications reimbursement rules changed as of January 1, 2011, taxpayers do not need a prescription to receive reimbursement for items for medical care that are not medicine or drugs. Therefore, the following items do not require a prescription for reimbursement from a health spending account:
- Adhesive bandages
- Braces and supports
- Catheters
- Contact lens solution and supplies
- Contraceptives
- Denture adhesives
- Diagnostic tests and monitors
- Elastic bandages
- First aid supplies
- Insulin and diabetic supplies
- Ostomy supplies
- Reading glasses
- Wheelchairs, walkers and canes
Although 2010’s Health Care Reform provisions made changes to qualified medical expenses, these accounts remain a great way for individuals and families to pay for medical expenses.
Contact Us
If you have a Health Savings Account and are unsure how these changes will impact you, then contact us. For additional information please contact Paul McEwan, CPA, MT, at 330.339.6651, or click here to email Paul.
Tags: flexible spending account, health reimbursement account, health savings account