FSA, OTC and OMG! New tax rules for medications
Oh my gosh, a new IRS law started this year.
If you don’t have a Flexible Spending Account, don’t read this,
(. . . unless you want to learn how government works under health reform and affects your medical care.)
FSAs are a way to make some of your medical expenses tax deductible. Fine. But now IRS tax rules mandate that those with a FSA must get a prescription for over-the-counter medicines!
(This is not to be confused with the law that keeps Sudafed behind the counter,
although it is an OTC. This is to prevent converting it into methamphetamine.)
According to FlexibleSpendingAccountsOnline.com/blog, Dr. Douglas Henley of the American Academy of Physicians was quoted as saying,
"It’s going to create a lot of new obstacles for patients and their doctors.
This just seems to be an unnecessary hassle and burden.”
The website also noted new FSA rules were designed to raise additional tax revenue to offset the costs of the health care reform bill. The purpose is to help insure the uninsured, a key goal of health reform.New rules for those with an FSA:
Step 1. Make an appointment with your doctor, pay your co-pay and the insurance company is billed the rest.
Step 2. Discuss with your doctor how you now need him (or her) to manage mild conditions that you used to do on your own with OTC meds.
Step 3. After taking up valuable doctor time and complicating your follow-up, take the prescription to your pharmacist, who might also feel this is a waste of their time.
Step 4. Submit your personal medical information treatment to the government under IRS rules.
Step 5. Congratulations, you saved 20 percent in taxes for what used to be a simple OTC self-treatment.
If the point is to turn people away from getting FSA and to bring in more tax dollars, then maybe the feds should just do it without hassling doctors and pharmacists. Sites on the Internet talk about the confusion for everyone about getting a “prescription” for an OTC medication.
Doctors are liable for recommending medicines, especially for an OTC stock bottle. More office visits are necessary to go over the condition. For example, writing a RP (real prescription) for one month of an anti-inflammatory allows the doctor to be sure that the patient gets a follow up.
But a bottle of Aleve might last six months. If stomach ulcers develop or if the person starts limping from a worse condition, one might question the doctor for all that Aleve he approved of by writing the OP (OTC prescription.)
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| New Orleans 2011 |
Make sure that the “prescription” for your OTC medication has the usual: your name, the doctor’s name and address, the date, the name of the med, the dosing, the quantity and refills allowed. Also newly required is the doctor’s license number, which is usually not on routine prescription pads. Of course the doctor is now in charge of the condition and follow-up is necessary.
According to texas.payflex.com: “Stockpiling of drugs and medicines in anticipation of a medical condition or at plan year-end and then submitting for reimbursement would be an ineligible request.”
Some OTC that are eligible and require a prescription:
Medication for stomach acid, diarrhea and gas; allergy, sinus, cold and cough, creams and topicals – antibiotic, antifungal, antiseptics, anti-itch, baby rash, cold sores, nasal sprays, pain relief (includes aspirin), Benadryl-type sleep medication and smoking deterrents.
There are many other items that are eligible, such as bandages, blood pressure monitors, reading glasses, etc. Also FSA has the following eligible items if medically necessary:
Co-pays, eye exams and glasses, dental care, mileage for medical care and more.
Some items not eligible are chapstick, deodorant and face creams but FSA states that even if considered necessary, it does not cover alternative medicine, cosmetic surgery, herbals, weight loss program. See fsafeds.gov for complete lists.
