Reform Affects OTC Drugs for HSAs MSAs and FSAs

[Crabcake Johnny]

PPACA Section 9003 creates Internal Revenue Code Section 106(f). The new section will require users of health flexible spending arrangements (FSAs) and health reimbursement arrangements (HRAs) to get prescriptions before using health account funds to pay for over-the-counter (OTC) drugs other than insulin.

Section 9003 also will require holders of health savings accounts (HSAs) and Archer Medical Savings Accounts (Archer MSAs) to get prescriptions if they want to use account funds to buy OTC drugs. HSA and MSA holders who use account funds to buy OTC drugs without a prescription will have to include the expenditures in gross income and pay an additional 20% tax, officials say.

PPACA: OTC Rules Bitter Pill for Card Firms - Regulatory,Legislative and Tax Issues - Life and Health Insurance News

 

[Full Throttle]

PPACA Section 9003 creates Internal Revenue Code Section 106(f). The new section will require users of health flexible spending arrangements (FSAs) and health reimbursement arrangements (HRAs) to get prescriptions before using health account funds to pay for over-the-counter (OTC) drugs other than insulin.

Section 9003 also will require holders of health savings accounts (HSAs) and Archer Medical Savings Accounts (Archer MSAs) to get prescriptions if they want to use account funds to buy OTC drugs. HSA and MSA holders who use account funds to buy OTC drugs without a prescription will have to include the expenditures in gross income and pay an additional 20% tax, officials say.

PPACA: OTC Rules Bitter Pill for Card Firms - Regulatory,Legislative and Tax Issues - Life and Health Insurance News

Pure stupidity. Imagine the discussion in the room:

"We need a way to pay for this health care bill without actually raising taxes. Suggestions?"

Dumb ass #1: "Let's do a specific industry wide tax on medical equipment companies. I can't see that raising costs in the system."

Dumb ass #2: "Let's eliminate using HSA's for OTC drugs to create more tax revenue. This package is going to be so good, everyone will be able to buy prescription drugs anyway."

Dumb ass #3: "Let's make huge cuts to Medicare and tell the public that coverage won't be effected. Oh wait..do you think the public will ask why we didn't do this earlier if we had the ability? Oh never mind, they're too stupid."

Dumb ass #4: "Let's just tell the clinics we'll pay them less, it worked for Medicare, why not for everyone? Oh, you're saying the under 65 market subsidizes the clinics through higher premiums? No problem, we're the federal government, they'll have to do more with less."

Dumb ass #5: "Why don't we increase Medicaid eligibility to more people and make the states pick up the tab. Well, except for Nevada and Florida since we want to get reelected."

"Good work guys, next problem to solve? We need to find away to get more voters in our corner, why don't we give citizenship to everyone in this country illegally?"

 

[stuy119]

Or they can create more office visits for prescriptions (which could just be OTC meds), creating more money for the large drug companies that is (essentially) subsidized by the insurance companies.

Profit!

 

[Full Throttle]

Or they can create more office visits for prescriptions (which could just be OTC meds), creating more money for the large drug companies that is (essentially) subsidized by the insurance companies.

Profit!

More revenue for one company, higher operating cost for another company or consumer. Result with no increase in productivity: fewer jobs, less standard of living.

Brilliant!

 

[AllenChicago]

Has anyone's HSA client been audited to the degree where they have to show where every dollar from their HSA account was spent? I only have a handful of HSA clients, but none of them have been audited...yet. -Allen

 

[stuy119]

Has anyone's HSA client been audited to the degree where they have to show where every dollar from their HSA account was spent? I only have a handful of HSA clients, but none of them have been audited...yet. -Allen

No one that I know of, but I'm thinking it's more likely to be part of a full-out audit by the IRS - and those are pretty rare.

 

[YouGotMyMoney]

Has anyone's HSA client been audited to the degree where they have to show where every dollar from their HSA account was spent? I only have a handful of HSA clients, but none of them have been audited...yet. -Allen

How would you know? You think you're clients would share that kind of personal information with you?

 

[somarco]

Throttle, that is priceless!

 

[HealthGuy]

Full throttle this is one of the best thread starters I have read in a long time too funny!