Healthcare Reform and the Impact on OTC Medicine Reimbursements

As a result of healthcare reform, one of the most immediate impacts is the change to Over-the-Counter (OTC) reimbursements. Effective Jan. 1, 2011, there will be no reimbursement of OTC medicines or drugs by Health FSA or HRA plans or from a Health Savings Account without a prescription.

This affects debit cards tied to these benefits. They will no longer be able to reimburse OTC medicines or drugs after Dec. 31, 2010 because they cannot determine or track if additional substantiation for the participant is required. These OTC medicine purchases will require another form of payment and the participant will need to submit a claim along with a prescription for the specific OTC medicine or drug in order to receive reimbursement.

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Interim Final Rule on Group Health Plan Claims, Appeals and External Review

The Departments of Treasury, Labor and Health and Human Services have issued guidance addressing the internal claims and appeals and external review processes. The requirements set forth in these interim final regulations apply only to non-grandfathered group health plans and are effective the first plan year beginning after Sept. 23, 2010 for calendar year plans starting Jan. 1, 2011. PPACA requires all non-grandfathered group health plans to implement an external review process in addition to the internal claims appeal process already mandated under ERISA.

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Qualified Transit and Parking Benefits Guidance

The IRS issued an informational letter on the tax treatment of qualified transportation benefits, specifically the use of transit passes and qualified parking that employers frequently provide through the use of smartcards.

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No Extension for COBRA Subsidy

As you know, the COBRA premium subsidy ended May 31, leaving those who were laid off after June 1 scrambling to find affordable health insurance. Laid-off workers who started on COBRA before May 31 can still receive the aid, but those who have exhausted the 15-month subsidy and those who are newly unemployed are not eligible.

The outlook for another subsidy renewal is up in the air. The Unemployment Compensation Extension Act of 2010 signed by President Obama on July 22, 2010, did not extend the COBRA premium reduction and support is lacking in Congress because of the cost to fund the premium assistance. Sen. Sherrod Brown (D-Ohio) and Sen. Robert Casey (D-Pa.) introduced a bill to reinstate the subsidy and pay for it by eliminating a tax break on annuity trusts. The proposal would again be retroactive for those who lost their jobs since June 1 and would extend the subsidy for six months instead of the 15 months.

DataPath University in Session

We’re in the middle of our second full day of training at the annual Summer Session User’s Conference. Our pre-conference sessions Tuesday – An Introduction to HRA Administration and Introducing the New DataPath 105 – were a great success.

Wednesday was packed with training sessions on MSP Reporting, Online Enrollment, setting up myRSC for TPAs, setting up the mySourceCard for Employees and Employers and Integrated Systems Importing.

We’re looking forward to wrapping up the conference tomorrow with informative sessions on the marketing services and educational resources provided by DataPath, and the best practices for Third Party Administrators to help your business.

If you aren’t here with us this week, we hope you join us next year!

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