Legislative Updates

8/2010
FSA Eligible OTC Products Changes

• OTC drugs and medicines will continue to be eligible for reimbursement as long as the request is accompanied by a doctor's prescription
• This means that items such as cough medicines, pain relievers, acid controllers, and diaper rash ointment will now require a doctor's prescription to be submitted along with the reimbursement request
• Insulin and other OTC items, such as band-aids, will continue to be eligible without a prescription
• Since this change applies to all expenses incurred on or after January 1, 2011, it will affect all plans and participants at the same time, regardless of the plan year

Sample categories of items that will require a doctor’s prescription:

• Acid Controllers
• Allergy & Sinus
• Antibiotic Products
• Anti-Diarrheals
• Anti-Gas
• Anti-Itch & Insect Bite
• Anti-parasitic Treatments
• Baby Rash Ointments/Creams
• Cold Sore Remedies
• Cough, Cold & Flu
• Digestive Aids
• Feminine Anti-Fungal/Anti-Itch
• Hemorrhoidal Preps
• Laxatives
• Motion Sickness
• Pain Relief
• Respiratory Treatments
• Sleep Aids & Sedatives
• Stomach Remedies

• Band Aids
• Birth Control
• Braces & Supports
• Catheters
• Contact Lens Supplies & Solutions
• Denture Adhesives
• Diagnostic Tests & Monitors
• Elastic Bandages & Wraps
• First Aid Supplies
• Insulin & Diabetic Supplies
• Ostomy Products
• Reading Glasses
• Wheelchairs, Walkers, Canes

• OTC drugs and medicines can no longer be purchased using the debit card.
• Even with a doctor’s note, the card will not accept these for purchase.
• The card will only allow eligible OTC and RX items to be purchased.
• Certain locations that accepted the card in 2010 may no longer accept the card in 2011.
• If the transaction denies in BPS because of an invalid MCC, it is likely that the merchant is not on the SIGIS 90% list.

2010
IRS Guidance Requires Group Health Plan Excise Tax Reporting in 2010
Beginning in 2010, employers that fail to comply with COBRA, HIPAA, and other federal group health plan mandates will have to file an excise tax return. Recent IRS guidance indicates that these taxes must be reported on Form 8928 and paid on or before the due date (without extension) of the employer’s federal income tax return. The guidance also clarifies HSA comparability rules in light of 2006 law changes.

For Regulation detail, please visit: edocket.access.gpo.gov/2009/pdf/E9-21225.pdf

Form 8928 is available on the IRS website: www.irs.gov/pub/irs-pdf/f8928.pdf

10/2012
EDI Mandate – file layouts – On January 16, 2009, the Department of Health and Human Services (HHS) published two final rules under the Administrative Simplification provisions of the Health Insurance Portability and Accountability Act (HIPAA). These rules impart changes to Title 45 – Public Welfare, Code of Federal Regulations, Part 162 – Administrative Requirements by mandating the following:

• Electronic Transaction Standards:
• ASC X12N 005010 with applicable Errata
• National Council for Prescription Drug Programs (NCPDP) D.0/Batch 1.2
• NCPDP Batch 3.0 for Medicaid Subrogation of Pharmacy Claims

10/2013
ICD-10 code conversion – Code Sets:

• ICD-10-CM Diagnosis
• ICD-10-PCS Inpatient Hospital Procedures Code Sets
• Covered entities (health care providers, health plans, and health care clearinghouses) must comply with these new regulations. Workers’ Compensation and Property and Casualty insurers are not covered by HIPAA.

3/1/09
COBRA – As a result of the American Recovery and Reinvestment Act of 2009 (ARRA), changes will affect employers whose group health plans are subject to COBRA. The Act provides a 65% government subsidy to employees who are involuntarily terminated between September 1, 2008, and December 31, 2009. The employer must first provide this payment and then be reimbursed by the government. The government will provide a 65% subsidy for up to 9 months of the COBRA premium, effective March 1, 2009, for certain terminated employees.

Update: President Obama signed legislation on March 2, 2010, to extend until March 31 eligibility for the 65%, 15-month COBRA premium subsidy to individuals who have involuntarily lost their jobs. The Temporary Extension Act of 2010 (H.R. 4691) amends the American Recovery and Reinvestment Act of 2009 (ARRA). Without the extension, workers laid off after Feb. 28 would have missed out on the subsidy. The law is retroactive, so workers who were involuntarily terminated on March 1 and 2 are eligible for the subsidy.

Employer Involvement:The employer must initially provide the payment to the third party administrator based on the billing statement, and then the employer will be reimbursed by the government.