Legislation introduced to restore OTCs as qualified FSA/HSA reimbursements

WASHINGTON — Four legislators on Thursday introduced legislation that would restore over-the-counter medicines as qualified reimbursements under health spending accounts and flexible spending accounts without a prescription. A provision in the Patient Protection and Affordable Care Act enacted in January had created a prescription requirement in order for OTC medicines to qualify for pre-tax reimbursements. 

Sens. Pat Roberts, R-Kan., and Ben Nelson, D-Neb., introduced the bill in the Senate; and Reps. Lynn Jenkins, R-Kan., and Shelley Berkley, D-Nev., introduced a similar bill to the House of Representatives.

“This prohibition takes away choice and flexibility from individuals about how to manage their healthcare expenses and adds yet another burden to physicians,” Roberts said. “Rather than promoting cost-effectiveness and accessibility, this provision directs people to potentially more costly, less convenient and more time-consuming alternatives.”

“Healthcare reform should be about increasing, not limiting, personal options and accessibility,” Jenkins added. “Medical savings accounts encourage personal ownership of one’s health care by giving individuals control over healthcare decisions and how to pay for that care. I am proud to help champion this bipartisan, bicameral bill in the House and hope our chamber will move quickly on this commonsense fix.”

Specifically, the legislation would repeal section 9003 of the Patient Protection and Affordable Care Act, restoring the ability of those participating in a medical savings account or other similar type of medical savings account to use the funds to purchase OTC medications without a doctor’s prescription.

“I have had patients complain about not being able to utilize their accounts for OTC products,” stated Brian Caswell, a member of the National Community Pharmacists Association executive committee. “I support this legislation because it will allow my patients to use their tax-preferred accounts on the OTC products they need at our independent pharmacy — without a prescription.”

“Over-the-counter medicines are often a first line of defense against ailments and injuries, and should be treated as medically reimbursable healthcare therapies, just like prescription medicines," commented Scott Melville, president and CEO for the Consumer Healthcare Products Association, which supports the legislation. "We urge Congress to reinstate a benefit that so many American families use to make medical expenses more affordable." The National Association of Chain Drug Stores also announced its support of the bipartisan legislation. 

According to a recent survey of consumers and primary care physicians, sponsored by the CHPA, primary care physicians estimated on average that 10% or more of visits to their offices were unnecessary and could have been avoided by self-management of health care, including the use of OTC medicines for minor ailments. In fact, according to the associated cost-savings study, $5.2 billion could be saved by consumers and taxpayers annually, if only half of the unnecessary visits were avoided by greater self-management of health care, including the use of OTC medicines.

Nearly 50 million Americans participate in FSAs and other health savings accounts. The accounts allow individuals to set aside their own money each year on a pre-tax basis to pay for such healthcare expenses as co-payments and other healthcare expenses not covered by insurance, prescriptions or over-the-counter medications.