FSAs and over the counter medications

LindaS · September 2003

As I'm sure you are all aware, the IRS has recently decided that over-the-counter medications are now eligible for reimbursement through FSA accounts. We are concerned about having to cut checks for $2.00, $4.00 and other small amounts when the expenses are submitted since the actual cost to process these checks is more than the checks are worth.

Do any of you have a limit on the amount of reimbursements? For example, does anyone's plan state that claims under a certain dollar amount are held until the expenses reach a certain level? Is this something we can do legally?

jmcaa · September 2003

Linda,
Our Flex Plan states:

"Minimum Check Amount of $10.00 - Expenses less than $10.00 will be carried forward until the total eligible claims submitted exceeds $10.00, or the end of the plan year, which ever comes first."

Regarding the reimbursements of OTC meds - we are starting this effective Jan. 1, 2004 in order for ees to figure their election for the full year since they can't change their election in the middle of the year just because of this clarification by the IRS concerning OTC meds.

We also checked with our TPA to make sure their weren't going to raise rates because of this change.

DJ

hrdirector · October 2003

Every plan I've ever seen had a dollar limit on the checks they cut - generally they held all claims until they hit $20 or $25 dollars - and they only cut checks a couple times a month.

mmurnahan · October 2003

Our organization has chosen to not include over the counter meds. I've already heard from some of the employees about this. But I was told it was a company decision whether to include or not. We thought it would be too much of a headache

scottorr · October 2003

According to our FSA administrator (ADP), you can set minimum limits. They said they are going to move toward the debit card system to help eliminate the cost of producing checks.

FSAs and over the counter medications

Comments