House panel to hold hearing on FSA reimbursements for over-the-counter drugs

April 19, 2012 – 10:53am


FEATURED SOLUTION ARC: What benefits managers need to know about health care reform


WASHINGTON—A House panel next week will hold a hearing on an unpopular provision in the health care reform law that restricts the use of flexible spending accounts to reimburse employees for over-the-counter medications.

Under that provision, FSA reimbursement is only permitted if the employee obtains a prescription for the medication.

“Physician groups have suggested that the OTC medication prescription requirement has imposed an unreasonable administrative burden, resulted in longer waits for appointments, and increased health care costs,” according to a statement released by the House Ways and Means Health subcommittee, which will hold the April 25 hearing.

Sixty-two percent of employers responding to a Midwest Business Group on Health survey said they favored repeal of the provision, which made it the second-most unpopular health care reform law provision among respondents. The most unpopular was the provision, effective in 2013, that will place a $2,500 annual cap on FSA reimbursements. Sixty-six percent of respondents favored repeal. There is no cap now, though employers typically limit annual FSA reimbursement to between $4,000 and $5,000.