The recently signed $2-trillion stimulus package (or CARES Act), includes two key provisions that will undoubtedly help the millions of Americans with FSA’s, HSA’s and HRA’s during a time where these plans are needed most.
The welcome changes include:
· Over the Counter RX Repeal: Written prescriptions will no longer be required for over the counter (OTC) drugs. Items like Tylenol, Claritin, Tamiflu, etc. are now eligible when purchased through your FSA, HSA or HRA. This change is effective immediately and is retroactive to January 1, 2020.
As you know, OTC drug purchases have required a prescription since 2011 per the Patient Protection and Affordable Care Act. This change caused confusion and unnecessary trips to the Doctor. This repeal means FSA, HSA and HRA account holders may again buy the OTC medicines they need to stay healthy now and in the future.
· Expansion of the definition of qualified OTC items to include Menstrual Care Products: The new allowance of menstrual care products as eligible under an FSA, HSA or HSA, effective immediately and retroactive to January 1, 2020. The bill indicates that this addition means a “tampon, pad, liner, cup, sponge, or similar product used by individuals with respect to menstruation” will qualify.
Although ABPlus began approving these items immediately, the timeline for merchants to implement the changes for debit card purchases will occur gradually and is expected to be completed within 4 – 6 weeks. This will undoubtedly result in inconsistencies in shopping experiences for the consumer (i.e. OTCs may be allowable at one merchant, but not another) as the industry makes this important transition. We expect any issues like this to be temporary and resolved in a short time frame.
We are extremely excited about this change and the opportunity to provide affordable access to OTC items via tax advantaged benefits. We will continue to provide updates as more information becomes available on this industry wide effort.