Written by Rachel Rouleau, FSAstore.com
No matter on which side of the coin you fall regarding the Affordable Care Act, something on which we can probably all agree is that thankfully, we have ECFC to help us advocate to protect the value of tax-advantaged accounts.
In our recent Capitol Hill visits, ECFC advocated, among other important recommendations, to rescind the over the counter prescription provision. ECFC’s materials noted the adverse impact the OTC prescription requirement has on healthcare spending, indicating that “individuals often have to schedule a doctor’s visit,” “The requirement…incentivizes individuals to purchase more costly brand drugs,” and “has increased the administrative burden faced by providers,” all points to which we at FSAstore.com couldn’t agree more.
Additionally, now more than ever, rescinding the OTC prescription provision only makes sense:
- The IRS announcement of a $500 carryover changes “Use-Or-Lose.” With the carryover, individuals are more inclined to enroll in an FSA and less inclined to use their FSA for “wasteful” year-end spending.
- The $2,500 cap on FSA contributions minimizes loss of tax revenue and encourages consumers to be wise about their spending.
- According to a study done in 2012:
- OTC medicines provide $102 billion in value to the U.S. healthcare system annually.
- Each dollar spent on OTC medicines saves $6-7 for the U.S. healthcare system, and
- 240 million people in the U.S. use OTC medicines‒60 million of them would not seek alternative treatment if OTC medicines were not available.
The OTC prescription provision makes FSAs harder to use and increases confusion around eligibility. With the $500 carryover and $2,500 cap, the rationale that led to this provision in the first place is no longer an issue.
S.1647 introduced by Senator Pat Roberts (R-Kan.) in November 2013, and a companion bill in the House (H.R. 2835) has bi-partisan support and aims to remove the OTC prescription provision. Let’s remind our Congressional leaders to support this bill, and do our part to help the 240 million U.S. consumers who rely on OTC medicines to stay healthy.
Information provided courtesy of the Employers Council on Flexible Compensation (ECFC), of which Glynn Griffing & Associates, Administrators is a proud member.
 Rachel Rouleau is the compliance director for FSAstore.com, the only e-commerce site stocked exclusively with FSA-eligible products. Rachel offers compliance support to FSAstore.com’s valued partners and ensures HIPAA and FSA regulation compliance with all of FSAstore.com’s partnership materials.