2011 OE 100-10009 : Page 1
Health care reform update Using an HSA to pay for OTC medicines? You will now need a prescription. If you have a health savings account (HSA) or are thinking about enrolling in an HSA-eligible health plan, you should know that there are two important changes that begin Jan. 1, 2011. Change 1: You will no longer be able to pay for over-the-counter (OTC) medicines with your HSA, unless you have a prescription. HSAs can still be used to pay for insulin and for many OTC supplies, such as bandages, wheelchairs and reading glasses. See examples below. Change 2: If you use an HSA to pay for items or services that aren’t qualified medical expenses and you are under age 65, the tax penalty will increase from 10 percent to 20 percent of the HSA distribution. Be sure to keep copies of your prescriptions and all receipts with your tax records. Examples of OTC items that will require a prescription • Acid controllers • Acne medicine • Aids for indigestion • Allergy and sinus medicine • Anti-diarrheal medicine • Baby rash ointment • Cold and flu medicine • Eye drops • Feminine anti-fungal or anti-itch products • Hemorrhoid treatment • Laxatives or stool softeners • Lice treatments • Motion sickness medicines • Nasal sprays or drops • Ointments for cuts, burns or rashes • Pain relievers, such as aspirin or ibuprofen • Sleep aids • Stomach remedies Examples of OTC items that will not require a prescription • Bandages • Birth control • Braces and supports • Catheters • Contact lens solution and supplies • Crutches • Denture cleaners and adhesives • Diagnostic tests and monitors (such as blood glucose monitors) • Elastic bandages and wraps • Insulin • Ostomy products • Reading glasses • Walkers, wheelchairs and canes You can view a complete list at www.irs.gov . For the latest reform information, visit www.healthcare.gov , the federal government website designed to help you understand the new laws and how they will affect you. What hasn’t changed The new laws do not change your ability to save pre-tax money in your HSA and use that money to pay for qualified medical expenses. Insurance coverage provided by or through UnitedHealthcare Insurance Company or its affiliates. Administrative services provided by UnitedHealthcare Insurance Company, United HealthCare Services, Inc., or their affiliates. Health Plan coverage provided by or through a UnitedHealthcare company. This communication is not intended as legal or tax advice. Please contact a competent legal or tax professional for personal advice on eligibility, tax treatment and restrictions. Federal and state laws and regulations are subject to change. Please check your health benefit plan materials to determine whether your employer will make supplemental contributions to your HSA. 100-10009 11/10 © 2010 United HealthCare Services, Inc.
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