Client Alert

Some Cafeteria Plans Must Be Amended by June 30

June 02, 2011

Eric Keller & Stephen H. Harris

The Patient Protection and Affordable Care Act amended the Internal Revenue Code to prohibit health care flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs) from reimbursing expenses incurred after December 31, 2010 for non-insulin over-the-counter drugs or medicines purchased without a prescription. Accordingly, expenses incurred for medicines or drugs are reimbursable under such accounts only if the medicine or drug (1) requires a prescription, (2) is insulin, or (3) is available without a prescription and the reimbursement request is accompanied by a prescription.

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