In March of this year, I finally wised up and opened a health care Flexible Spending Account (FSA) through my job.
Simple enough. Fill out some paperwork. Decide how much to deduct each pay
period. Spend the money on deductibles, prescriptions, glasses and, best of all, over-the-counter medication. It’s use-it-or-lose-it so, worst
case scenario, on the day 365, I run out to the drug store and load up
on Band-Aids and Tylenol.
Yup, that’s what I signed up for. Then along came the Patient Protection and Affordable Care Act — you know, the big health-care overhaul from this Summer — and, on September 3, 2010, an IRS Notice addressing the Act’s effect on our FSAs.
Guess what? That FSA we signed up for ain’t all it’s cracked up to be
anymore. It turns out after the end of 2010, only medical expenses and
prescription drugs are covered. Come January 1, if you want to use that FSA for Preparation-H… Tough sh*t! In the drugstore, only the good
stuff behind the pharmacy counter will be covered — provided you have a prescription. (Don’t worry medical, dental and eye care are still
Employers who offer FSAs to employees should contact their insurance
brokers and carriers to ensure that employees are kept abreast of this
change to the their FSAs.