2010-10-06 Important notice about your HCSA and OTC medications

I am writing to inform you of an important upcoming change to IRS code governing what types of expenses are eligible for reimbursement from your Health Care Spending Account (HCSA).

As of January 1, 2011, over-the-counter (OTC) medications including but not limited to non-prescription pain relievers, antihistamines and other medications available without a prescription will no longer be considered eligible HCSA expenses unless you obtain a prescription. This change impacts both your current and future Health Care Spending Accounts.  

As in past years, you will be able to continue to use remaining HCSA funds from your 2010 account until March 15, 2011 – however, unless you have a prescription, OTC medications will only be considered eligible expenses if you incur the expense BEFORE January 1, 2011.  If you typically use the last of your HCSA funds by restocking your supplies of non-prescription OTC medications, be sure to do this no later than Dec. 31, 2010 if you do not have prescriptions for these OTC medications.  OTC supplies that do not contain medications, such as hot and cold packs, thermometers, alcohol swabs, etc. continue to be eligible expenses without a prescription.

In addition, as of January 1, 2011, OTC medications cannot be purchased with your HCSA debit card.  You will need to purchase the items first and then submit a reimbursement form along with your receipt and proof of a prescription.

MSU Benefits is still seeking clarification on exactly what types of medications will be impacted by the new regulations and we will include more detailed information in the FSA Open Enrollment Guide which you will receive later this fall.  However, we thought it was important to give you an early notice that most OTC medications will become ineligible expenses without a prescription as of January 1, 2011.

If you have questions about any of the preceding information, please contact MSU Human Resources Benefits at 517-353-4434, 1-800-353-4434 or via e-mail at benefitsinfo@hr.msu.edu.

Corie Snellenberger
Assistant Director of Benefits
MSU Human Resources