On March 27,2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law. While the bulk of the provisions in this Act focus on emergency support for small businesses due to the coronavirus pandemic, it also provides positive changes for FSA, HSA, and HRA participants. This legislation:
- Reverses the “prescription” requirement for Over-the-Counter (OTC) drugs for HSA, HRA*, and FSA reimbursement.
- Includes reimbursement eligibility for menstrual care products.
The Act has a retroactive start date of January 1, 2020. For those enrolled in a plan administered by Sound Benefit Administration, we are more than happy to approve previously denied OTC claims but only if the participant resubmits the claim.
Provided they have a receipt, participants may also submit new claims for OTC and menstrual care products purchased after 1/1/2020.
Please note: We have updated our system to accept manually submitted OTC claims, but debit card swipes will be dependent on when individual merchants update their terminals.
The IIAS (Inventory Information Approval System) is currently working to identify changes to the eligibility criteria and eligible product list. This is no small task. They are adding/updating more than 19,000 OTC medications to their database and are doing a full review on nearly a thousand items in feminine care categories..
Each client with a plan that allows OTC medications** will receive a Summary of Material Modification (SMM) as an amendment to plan documents. Each client needs to distribute the SMM to current participants in the plan. All claim forms and online documents will be updated to remove the requirement for a doctor’s prescription for OTC items.
With Americans spending over $35B on OTC medications and the average woman spending nearly $6,500 on feminine care products during her reproductive lifetime, the ability to purchase these items on a pre-tax basis can add up over time for the average participant.
*Many HRAs (QSEHRAs, EBHRA, ICHRAs too) only reimburse deductible-eligible expenses. This new rule does not require HRAs to now include OTC medications and feminine products. It only requires those plans that currently do allow non-deductible OTC expenses to reimburse them without a prescription.
**In addition to HRAs that do not allow for OTC reimbursement, SMMs are not required/will not be provided for individual HSA accounts.