Big Changes to Health Savings Accounts, AND FSAs.

[DawnCt1]

We have always saved our receipts for Tylenol, Pepto Bismol, bandaides, aspirin, Ibuprofen, Claritin, etc, and any number of OTC medications so we could pay for them with funds set aside in our health savings account. This coming year, I was surprised to learn that these or any OTC medication will not be accepted as a valid purchase UNLESS you have a physician's prescription. This is not going to save money but necessitate a co pay to get a script for OTC drugs. I may rethink how much we set aside in our HSA.

OTC Medicines: Beginning in 2011, HSA funds cannot be used for over-the-counter medicines unless specifically prescribed by a doctor. This is similar to the new restrictions on FSAs, which will prevent funds from being used for items such as contact solution and bandages.

http://www.mydollarplan.com/changes-to-health-savings-accounts/

 

[hellokitty86]

That really stinks. We don't set aside money for our HSA, but my husband's company replenishes it every year for us to use on medical expenses. I use it alot for OTC medication and pay for them when I pick up my prescriptions all together. Guess I won't be doing that anymore unless I get my Dr. to prescibe them to me!

 

[LuvCuteBoys]

You won't be able to use your flex spending account for OTC meds, either.

 

[DawnCt1]

That really stinks. We don't set aside money for our HSA, but my husband's company replenishes it every year for us to use on medical expenses. I use it alot for OTC medication and pay for them when I pick up my prescriptions all together. Guess I won't be doing that anymore unless I get my Dr. to prescibe them to me!

Also, I think that the funds you can set aside this year os $2500. Thats barely a root canal and a crown!

 

[DawnCt1]

You won't be able to use your flex spending account for OTC meds, either.

Only with a script from your doc. If they were smart they would have them printed out and signed at the front desk.

 

[CaliforniaDreamin]

Also, I think that the funds you can set aside this year os $2500. Thats barely a root canal and a crown!

Thank God I got braces put on both of my DDs when the max was $5000. (one DD per year, that sentence sounds like I only spent $5k for 2 dds in one year)

 

[It'sWDW4me]

Also, I think that the funds you can set aside this year os $2500. Thats barely a root canal and a crown!

I think it's still a max of $5,000 for 2011 but will drop to a max of $2,500 for 2012. That's what HR told us in the major health coverage meeting last week, anyway.

 

[DawnCt1]

I think it's still a max of $5,000 for 2011 but will drop to a max of $2,500 for 2012. That's what HR told us in the major health coverage meeting last week, anyway.

That's good to hear.

 

[mamacatnv]

FSA's are different from HSA
I knew FSA's were no longer going to allow OTC, I haven't explored the HSA as this is the first year we have it as an option.

Regarding the braces, with the reduction in allowance this is where spreading out those payments would maximize the benefit instead of paying them in one lump sum. When DS had his we spread it over the 18 months he wore them and we were able to submit the expenses to our FSA as we paid them over the course of 2 benefit years.

 

[lemondog]

Who do we need to thank for this ridiculous new law? Is there is a point to it? And weird that you can still buy band-aids, saline solution, etc. with it, but not actual meds.

The $2500 cap is going to hurt us too. With a family of 5 we ALWAYS spend well beyond that even with no health conditions or major medical problems.

 

[MushyMushy]

Wow, that's really going to affect us! We have an FSA and we use quite a bit of it on OTC drugs. I know my doctor will prescribe what I typically get OTC (like Prilosec and ibuprofen), but that's just going to end up putting a burden on our prescription insurance plan rather it coming out of what we're putting into the FSA. I'm going to have to look and see what other changes are coming with that. My husband had planned on contributing more money to ours next year, but that might not be such a good idea. Oh and we have a debit card, which we won't be able to use for OTC meds, even when we do have a script.

So basically, if any of us get a cold, we'll have to go see our doctor to get a script (more burden on health insurance), then purchase the cold med out of pocket and send in the receipt and script to get reimbursed.

 

[laurie31]

Wow, that's really going to affect us! We have an FSA and we use quite a bit of it on OTC drugs. I know my doctor will prescribe what I typically get OTC (like Prilosec and ibuprofen), but that's just going to end up putting a burden on our prescription insurance plan rather it coming out of what we're putting into the FSA. I'm going to have to look and see what other changes are coming with that. My husband had planned on contributing more money to ours next year, but that might not be such a good idea. Oh and we have a debit card, which we won't be able to use for OTC meds, even when we do have a script.

So basically, if any of us get a cold, we'll have to go see our doctor to get a script (more burden on health insurance), then purchase the cold med out of pocket and send in the receipt and script to get reimbursed.

First bolded- just because you hav e a script, it will still be OTC, and you will buy it like always. It won't come from your prescription insurance, as a pharmacist won't be filling it (unless, for example, your doc writes for prescription strength ibuprofen).

We use OTC prilosec and zyrtec, but I was just going to get the MD to write a script for them when we go for regular well-visits. (no extra co-pay for us but it is a bummer for the doc).

As for the HSA, we are still putting the max in there, as it is not "use it or lose it" the way an FSA is, and it is a great tax-free savings. We want to take advantage of it while we can.

ETA - I forgot to reply to the second bolded part. Remember an FSA or HSA only saves you the TAX on medication or whatever. So you are saving about 30%. I wouldn't think it would be worth a $30 (or more) co-pay, plus your time to get a script for cold meds, just to save 30% on them. Cold meds aren't very expensive anyway. It would have to be $100 worth of meds just to break even. Either get your doc to write a script for common OTC cold meds when you go for your check-up, or just don't worry about saving the tax on them. I never think to turn that stuff in anyway. (I know...bad, bad! )

 

[CaliforniaDreamin]

FSA's are different from HSA
I knew FSA's were no longer going to allow OTC, I haven't explored the HSA as this is the first year we have it as an option.

Regarding the braces, with the reduction in allowance this is where spreading out those payments would maximize the benefit instead of paying them in one lump sum. When DS had his we spread it over the 18 months he wore them and we were able to submit the expenses to our FSA as we paid them over the course of 2 benefit years.

I did it a bit differently. Just elected the max each year and paid the ortho in full the day the braces were put on. Then the deductions came out of my paycheck over 26 weeks. With the pretax deductions, it actually didn't hurt my check as much as I expected.

 

[4nana]

Brace yourselves, this is just the beginning of the health reform. Wait until we learn all the new rules and regulations in thousands of pages no one read.

We have already rec'd notice as of January 1 our health ins. ends . HNY retirees who rec'd health ins benefits in their retirement pkg. will no longer be covered.
Sadly, under the reform many big companies will no longer be able to afford to offer health insurance to their employees.

It saddens me to think of where we are headed.

 

[NotUrsula]

Are you SURE that contact solution won't be covered now? I'd be rather surprised if it is being counted as an OTC med.

The addition of OTC meds to the eligible list was a relatively new thing; you have only been able to claim those since some time after 2003. My understanding is that the law is simply rolling back to the original eligibility categories. Contact lens solution (AND diabetes testing strips) were eligible for reimbursement before the OTC category was added, so if this is a straightforward rollback, then they should still be eligible after the change.

 

[golfgal]

We have always saved our receipts for Tylenol, Pepto Bismol, bandaides, aspirin, Ibuprofen, Claritin, etc, and any number of OTC medications so we could pay for them with funds set aside in our health savings account. This coming year, I was surprised to learn that these or any OTC medication will not be accepted as a valid purchase UNLESS you have a physician's prescription. This is not going to save money but necessitate a co pay to get a script for OTC drugs. I may rethink how much we set aside in our HSA.

http://www.mydollarplan.com/changes-to-health-savings-accounts/

Also, I think that the funds you can set aside this year os $2500. Thats barely a root canal and a crown!

Don't confuse a Health Savings Account with a Flexible Spending account. Put all the money you can into your Health Savings Account and don't touch it. That money goes in tax free, grows tax free and can be spent tax free on qualified medical expenses-including health insurance plans if you are over 65. It can also go to pay assisted living expenses and long term care insurance premiums. They are really nice accounts. A Flex Spend account is where you put some money in each year but if you don't use it you lose it.

 

[Nancy]

Are you SURE that contact solution won't be covered now? I'd be rather surprised if it is being counted as an OTC med.

The addition of OTC meds to the eligible list was a relatively new thing; you have only been able to claim those since some time after 2003. My understanding is that the law is simply rolling back to the original eligibility categories. Contact lens solution (AND diabetes testing strips) were eligible for reimbursement before the OTC category was added, so if this is a straightforward rollback, then they should still be eligible after the change.

from what I was told at work it is only affecting the OTC meds...nothing else. I even asked about the contact lens solution and first aid items and was told those are still eligible expenses for FSA and HSA.

 

[laurie31]

Are you SURE that contact solution won't be covered now? I'd be rather surprised if it is being counted as an OTC med.

The addition of OTC meds to the eligible list was a relatively new thing; you have only been able to claim those since some time after 2003. My understanding is that the law is simply rolling back to the original eligibility categories. Contact lens solution (AND diabetes testing strips) were eligible for reimbursement before the OTC category was added, so if this is a straightforward rollback, then they should still be eligible after the change.

Contact solution is still eligible as always. Only the rules for OTC meds have changed.

Don't confuse a Health Savings Account with a Flexible Spending account. Put all the money you can into your Health Savings Account and don't touch it. That money goes in tax free, grows tax free and can be spent tax free on qualified medical expenses-including health insurance plans if you are over 65. It can also go to pay assisted living expenses and long term care insurance premiums. They are really nice accounts. A Flex Spend account is where you put some money in each year but if you don't use it you lose it.

 

[shelly3girls]

In terms of braces, it doesn't matter how you pay. The HSA reimbursement applies to the timing of the treatment. Your orthodontist is supposed to make up a treatment plan to lay out when the expenses are incurred and that is how the money should be dispensed.

 

[CaliforniaDreamin]

In terms of braces, it doesn't matter how you pay. The HSA reimbursement applies to the timing of the treatment. Your orthodontist is supposed to make up a treatment plan to lay out when the expenses are incurred and that is how the money should be dispensed.

I didn't need a payment plan. I would elect 5k for the next year, our vendor would send me a Visa card, when the 5k was made eligible for use, I would make the appts to get the braces on. The day they were put on, I gave the ortho office the card, had them run it for 5k, received a receipt for 5k, which I then faxed to the vendor as they require receipts, esp on a large expense like braces. Repeated the same procedure the following year. Had 5k reloaded to the card and paid 5k the day the braces were put on. There was no dispensing of funds, unless you count the deductions from my check to the FSA vendor. But as far as the ortho office was concerned, they received 5k the day the braces were put on.