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The president signed The CARES Act into law on Friday March 27th

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Category: Cafeteria Plans, FSA, Health Care Reform, HRA, HSA,


This law has many important components, one of which permanently reinstates coverage of Over the Counter (OTC) drugs and medicines as items eligible for reimbursement under Code 213(d) expenses in FSA, HRA, and HSA plans. With this law, the drugs and medicines will no longer require participants to have a prescription to prove eligibility. In addition to the reinstatement of OTC eligibility, the bill expands the eligible OTC definition to include menstrual care products (i.e. tampons, pads, etc.).

This change is retroactive and effective for expenses incurred on or after January 1, 2020.

Immediately ABG will start to approve manual claims submitted for over-the-counter items and menstrual care products—we have started instructing our claims processors on this. Although the card will not be ready to purchase these items for another few weeks’ employees will be able to submit manual claims for out-of-pocket expenses. We will also be approving any items that were purchased at a 90%rule merchant if we are provided a receipt indicating that the item was for a qualifying over-the-counter item. As you can tell from the below explanation we received, there are still determinations to be made on exactly what items will be classified as eligible.

Once the new plan document language is available we will be amending the FSA plan documents.

There is not yet a comprehensive list available but it is in process of being finalized. Here are a few data points for you to be aware of:

  1. The SIGIS vote to adopt the new eligible items will take place via email sometime during the week of 4/6.
  2. Assuming adoption, the revised Eligible Product List (EPL) criteria will be published on 4/15.
  3. From there, merchant adoption will depend on how quickly they pick up change (note, all SIGIS compliant relators are required to update their systems monthly) and update their system with the changes.
  4. As for the number of new items that will be approved here is a quick snapshot broken down by OTC and Menstrual Care (Feminine Care):
  • With the ACA there were 15,019 OTC items that were removed from the eligible items list. These will ALL be added back automatically and will not be reviewed by SIGIS.
  • There have been 1,282 OTC items submitted by members since the ACA change. These have been reviewed by the SIGIS committee and assigned appropriately, as such, will be added to the list of eligible items.
  • Since the ACA there were 2,810 OTC items that were rejected as OTC and not added. These will be reviewed again and likely added.
  • Menstrual Care (Feminine Care) items have never been eligible and therefore will have to be reviewed in totality. These items will not make it until the 5/15 publishing of the list.

In Summary- ~17,500 OTC items will be added to the list on 4/15, and adopted by the merchants soon thereafter. The Menstrual Care (Feminine Care) items will most likely be added 5/15 and be available for card swipe auto substantiation shortly thereafter.

Let us know if you have any questions or would like additional information.

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