Retail News Breaks
Bills seek FSA use for OTC medicines without Rx
February 10th, 2011
ALEXANDRIA, Va. – The National Association of Chain Drug Stores is applauding new House and Senate bills that would let consumers use flexible spending accounts (FSAs) and health savings accounts (HSAs) to buy over-the-counter drugs without a prescription.
NACDS said Thursday that the companion legislation — The Patients' Freedom to Choose Act of 2011, introduced by Rep. Erik Paulsen (R., Minn.) and Sen. Kay Bailey Hutchison (R., Texas) — aims to change a provision in the Patient Protection and Affordable Care Act (PPACA) health care reform law that went into effect this year.
Under the law, patients must first get a prescription for an OTC medication before they can be reimbursed from their pretaxed FSA or HSA.
"By restoring consumers' ability to use FSAs and HSAs for over-the-counter products, these bills will help ensure that Americans can continue to conveniently utilize their local pharmacies for cost-saving OTCs," NACDS president and chief executive officer Steve Anderson said in a statement.
"An estimated 35 million working Americans rely on voluntary contributions of pretax dollars to FSAs to help meet their basic health care needs. Prohibiting the use of FSA funds to purchase these medicines, or requiring a prescription or other documentation from a doctor, limits access and eliminates the cost-efficiencies associated with these medicines," Anderson noted.
In late November, NACDS was part of a coalition — along with the Consumer Healthcare Products Association, National Grocers Association, Food Marketing Institute, American Pharmacists Association and National Community Pharmacists Association — that called on Congress to repeal the PPACA provision requiring a prescription for FSA/HSA purchases of OTC drugs, which they dubbed a "cough and cold tax." Soon after NACDS created materials for pharmacy retailers to use to inform customers about new requirement.
Those opposing the provision achieved an incremental victory in late December, NACDS noted, when the Internal Revenue Service announced that FSA debit cards would be allowed to be used to buy OTC medications with a prescription. Previously, the IRS had indicated that these debit cards wouldn't be allowed for use in purchasing medication affected by the new policy, even if a consumer had obtained a prescription.
NACDS added that the legislation introduced this week by Hutchison and Paulsen, who was sent a letter of support, would provide a more comprehensive remedy to the issue. "We appreciate the leadership and commitment of Rep. Paulsen and Sen. Hutchison in introducing their companion bills," Anderson stated.
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