March 23, 2010, President Obama signed into law new health care reform legislation.  This legislation brings far-reaching changes for employer-provided health coverage.  The purpose of this memo is to provide summary information regarding how the health care reform legislation will affect Health Flexible Spending Arrangements (FSA) and Health Reimbursement Arrangements HRA) over the next few years.

Over The Counter Drugs and Medication Restrictions.   Effective January 1, 2011, OTC drugs and medicines are no longer reimbursable by health FSAs or HRAs except for insulin. OTC drugs and medicine prescribed by a physician to treat a specific medical condition may still qualify.  The written prescription should include the medical condition being treated as well as the time frame for which the drug is prescribed (i.e. 90 day prescription).  For non-calendar year plans, this will be a mid-year change.

 Health FSA Salary Reduction Limits.   Effective January 1, 2017, the annual maximum for employee contributions to the Health FSA will be limited to $2,600.00.  This limitation is only for employee contributions to the FSA account.  Any contributions made by the employer on behalf of the employee to the benefit would be in addition to the $2,600.00 annual limit. 

The mileage rate for medical travel in 2016 is $.19 per mile.  No change for 2017















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