Posted on 07/23/2010 4:31:15 PM PDT by BoneHead
“Your answer is that my Medical Assurance company rather than just telling me that OTC Medications are not covered in the FBA, are fabricating the requirement that I have to get some type of doctors orders for it?”
Well, actually your company is merely restating what PPACA says:
“Effective January 1, 2011 in order to be reimbursed for over-the-counter drugs and medicines purchased on or after this date the participant must provide a medical practitioner’s prescription for the item(s).”
“The PPACA has restricted eligible reimbursement expenses for over-the-counter medicine to prescription medication and insulin only. Employees who choose to participate in a HCRA account during the 2011 plan year will need to obtain a physician prescription for over-the-counter medications to use their HCRA allocations for reimbursement. Prescriptions will be required even if the medication is available without one.”
http://www.lanl.gov/worklife/benefits/health/ppaca.shtml
Thus, they haven’t invented a new restriction. They are doing their best to comply with an idiotic law passed by Congress. I don’t know what else to tell you.
I’m sure that the requirement to get a prescription even for non-prescription meds was an “escape clause” devised by Congress. For REALLY IMPORTANT medications, people still can get reimbursed, but only if they go through the red tape of getting MD authorization. For 99% of over the counter meds—such as aspirin—the hassle isn’t worth the few dollars of FSA reimbursement, so the IRS will end up saving money on items that in the past were routinely paid for through FSA cards/accounts.
I once worked in Human Resources but it was 20+ years ago. My boss required professionalism from each of us because "the attitude of Human Resources set the tone for the entire company" (over 10,000 employees). Can't speak for what goes on today, except from my experience as a wife of employee.
I do too, you never know with any of them! It is also good so you can assess how much you really need to put into the account in subsequent years.
My understanding of this tangled web is that Company A contracts with MedAssurance Company B who collects the money and administers distribution through the plan year. At the end of the year the left over moneys are forfeit.
Is that where the IRS "saving money" comes in? I thought that any money left over was the MedAssurance company's profit for the year, but it could well be that the IRS gets some lions share of it. I don't know, I'm only guessing.
You have got to keep track of where your money goes. It took us a year or two to be sure that we could regularly max out our FBA which lowered our tax burden at the end of the year.
Then monthly reimbursement requests relieves the cash flow problem of the reduced monthly wage (to fund the FSA).
It just took some records keeping. But well worth it.
Damn their eyes! Ridicule Congress! Fire Bureaucrats! Tar and Feather!
“There is just one statement that you made that confuses me: so the IRS will end up saving money on items that in the past were routinely paid for through FSA cards/accounts.”
I honestly don’t know whether MedAssurance keeps all the unspent amounts or splits these with employer: they don’t go to the IRS.
However, remember that these FSAs are tax-privileged. A dollar spent out of the FSA is a dollar that is not taxed. So if IRS reduces the allowable spending from FSAs (which it has done both by restricting the types of spending that can be covered, but also by imposing a tighter cap on the amount you can bank in such accounts each year), that means it loses fewer tax dollars.
Due to this change, every dollar you spend on aspirin will be paid for in after-tax dollars, whereas before, Uncle Sam was implicitly subsidizing your aspirin by X% where X=your marginal tax rate (i.e., up to 50% for the highest income employees, but perhaps only 15.65% for the lowest paid employees who only face a payroll tax liability).
“Damn their eyes! Ridicule Congress! Fire Bureaucrats! Tar and Feather!”
This isn’t the only “back-door” change resulting from health care reform. Congress also is taxing health insurers, pharmaceutical manufacturers and medical device makers literally billions of dollars a year to help bankroll this boondoggle. It appears that these big companies (the administration wants you to read this as “greedy profit-makers”) are paying these taxes.
But guess what: we all know that in the real world, these companies all will simply pass along the added taxes onto consumers in the form of higher prices. So it will look as if these “greedy profit-makers” are shamelessly jacking up their prices to fatten their profits when in reality this is a price increase engineered by Congress so that all the extra revenues garnered by the price increase end up in the U.S. Treasury.
This is just one of many instances in which Obama has defacto violated his pledge not to raise taxes on families below $250,000 income (unless we unrealistically imagine such families do not purchase insurance, medications or medical devices), by imposing these taxes indirectly instead of directly. So I would extend the reach of your wrath not only to Congress, but to the Obama administration as well.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.