The Impact of Health Care Reform on Flexible Spending Accounts

The recent passage of Health Care Reformdependents up to 26 years old.
legislation will affect virtually every American inOver-the-Counter (OTC) Medicine
one way or another. Among many other healthOTC medicine is still eligible, however, effective
care benefits, regulations for Flexible SpendingJanuary 1, 2011, a prescription or letter of medical
Accounts have also been altered by Health Carenecessity will be required for OTC medicines to
Reform.be reimbursed through an FSA, HRA or HSA.
Children up to Age 26OTC items such as insulin, contact lens solution,
1. There is a requirement for group healthbandages and durable medical equipment will
insurance plans to cover children up to age 26.continue to be covered without a prescription. A
This requirement applies to plan years that begincopy of BASIC's Letter of Medical Necessity form
on or after September 23, 2010. Plans that run oncan be found by clicking here.
a calendar year, as most do, would not have toContribution Limit
begin covering these young adults until January 1,For tax years beginning after 12/31/2012, annual
2011.Health FSA contributions will be capped at $2,500.
2. Effective March 30, 2010 parents can now useStarting in 2014, this contribution limit will increase
their Flexible Spending Accounts to pay foreach year to adjust for inflation.
medical expenses for their children regardless ofIf you are a current client of BASIC Flex, please
tax dependency status, as long as the child doescall 800-372-3539 if you have any questions. If
not reach age 27 in that tax year. With employeryou are not a client of BASIC Flex, please call
approval, employees can now increase800-444-1922 ext. 3. You may also request a
contributions to their flexible spending accountsproposal here.
midyear to pay for medical expenses for their