How The Health Reform Act Affected My Employee Benefits

It’s that time of the year again for our employee benefits annual enrollment, which is on October 1 thru October 30, 2010, and I just received a newsletter which includes the preview of the upcoming changes. The annual enrollment from my work allows me to make changes on the following benefits:

• Health Insurance
• Dental Insurance
• Accidental Death and Dismemberment (AD&D) Insurance
• Disability Insurance
• Medical Coverage Protection
• Life Insurance
• Flexible Spending Accounts

When President Obama signed the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, the Act includes a number of changes that may affect us in the upcoming years. One of the changes affecting us is the Healthcare Spending Accounts (HSA), which is a savings account that is made before taxes and is used for qualified healthcare expenses. The beauty about this account is that it is an above-the-line tax deduction or a deduction that is considered before I arrive at my Adjusted Gross Income (AGI). We normally contribute a set amount on a monthly basis and when we incur the expense, we would then submit it to the plan administrator to get reimbursed. Every year, we sign up for this in order to save money on taxes on the expenses that we are already spending anyways like over-the-counter medicines, health visits deductibles, and other health expenses. Because of the healthcare reform that will take effect on January 1, 2011, we may need to re-adjust our monthly savings account because some of the things that qualify before no longer do with the new healthcare reform act.

What Changes:

To receive reimbursement for over-the-counter (OTC) medications from my healthcare spending account, I must now submit a doctor’s prescription for that medication. The following is a sample listing of OTC that will require a doctor’s prescription in order to be eligible for reimbursement from the HSA:

• Allergy Medicines
• Cough, Cold & Flu Medicines
• Pain Relief Medicines
• Respiratory Treatments
• Sleep Aids & Sedatives
• Stomach Remedies

What’s not affected:

However, not all of them require a doctor’s prescription to qualify. Below are samples of OTC items for which I can receive reimbursement without a doctor’s prescription:

• Band-aids
• Contact Lens Supplies & Solutions
• Denture Adhesives
• First-Aid Supplies
• Diabetic Supplies

For a comprehensive list, please read the article on otc drugs and medicines affected by the health reform act.