Flexible Spending Account changes coming in 2011


Active pastors who participate in the IGRC FLEX plan (also called Section 125 Plan, Cafeteria Plan, Flexible Medical Spending Plan, FSA Plan) will notice a change in the rules regarding the purchase of over-the-counter (OTC) medications with the FLEX plan beginning in 2011.

The recent Health Care Reform Act (PPACA)  vastly reduces your ability to claim reimbursements for OTC medications. Pastors should consider these changes in making plans for their salary-reduction amounts in 2011. Beginning in Jan. 1, 2011, over-the-counter medications can only be reimbursed by the FLEX plan in 2011 if they are purchased with a doctor's prescription. The new rules do not apply to the purchase of insulin or diabetic supplies.

Will my FLEX card still work for purchases of OTC medications at the register?

No. The regulations require Flex Cards to be deactivated for these purchases.

I have a prescription for an OTC medication; how do I get reimbursed?

You will probably have to file your claim on paper with copies of your prescriptions and receipts.

If I have money left over from 2010, can I purchase OTC medications with it in 2011?

No, the changes take effect in 2011, even for 2010 plan year funds.

What about other supplies like crutches, bandages, and self-diagnostic kits?

Generally, only medicine is covered by the new rules, so supplies could still be eligible for reimbursement.

Can I still use the FLEX Plan for co-pays, deductibles and unreimbursed expenses from medical providers?

Yes – no change there. However, be aware that the $6000 limit in our current plan has to be reduced to $2500 in 2013. So if Junior needs braces, you might want to think about it sooner than later.

Any other questions?

You may address questions by emailing Rick VanGiesen.