Flexible spending arrangements (FSAs), health savings accounts (HSAs), and other tax-preferred accounts are valuable programs offered by many employers to help consumers save money by planning for anticipated medical expenses. These accounts work by allowing employees to set aside pre-tax dollars in order to pay for health-related items and expenses throughout a calendar year. Since 2003, most over-the-counter (OTC) medicines have been eligible for reimbursement under FSAs and HSAs. However, the Patient Protection and Affordable Care Act of 2010 (PPACA, P.L. 111-148/P.L. 111-152), signed into law March 23, 2010, removed OTC medicine eligibility from FSAs, HSAs, and other similar accounts unless the medicine is prescribed. On December 23, 2010, the Internal Revenue Service issued a guidance explaining the 2011 changes to FSAs and HSAs, which went into effect January 1st that year.

In March of 2011, CHPA convened a meeting at its headquarters of representatives of physicians, insurers, pharmacies, pharmacists, pharmacy benefit managers, patients, consumers, retailers, small businesses, and large employers. Dubbed the “Health Choices Coalition,” this group of stakeholders works cooperatively to advocate for repealing the provision of PPACA that requires consumers to first seek a doctor’s prescription if they are to utilize their tax-preferred accounts to purchase OTC medicines, a requirement that contravenes PPACA’s goals of lowered healthcare costs and fewer unnecessary visits to the doctor.

On July 14, 2011, Representatives Lynn Jenkins (R-KS) and Shelley Berkley (D-NV) and Senators Pat Roberts (R-KS) and Ben Nelson (D-NE) introduced the “Restoring Access to Medication Act” (H.R. 2529/S. 1368), which would repeal the OTC provision of PPACA.  One of the few bipartisan, bicameral healthcare repeal bills introduced in the 112^th Congress, this legislation has attracted a number of diverse cosponsors.  H.R. 2529 has 58 bipartisan cosponsors in the House, while S. 1368 has 9 in the Senate.  The Health Choices Coalition supports this legislation fully and was pleased that the repeal portion of the bill was included in a package of bills approved by the House on June 7, 2012.  While a path forward in the Senate remains unclear, the members of the Health Choices Coalition will seek every opportunity to work with the Senate to pass this important legislation.

Related links:

• "Health Choices Coalition Urges Congress to Reverse Over-the-Counter Medicine Restrictions on Flexible Spending Arrangements"
• "CHPA Applauds Introduction of The Patients' Freedom to Choose Act"
• "Coalition Calls on U.S. Congress to Repeal the Cough and Cold Tax"
• CHPA letter to House leadership spporting final passage of OTC FSA-HSA provision