The deadline to amend cafeteria plans to address the new restrictions on the pre-tax reimbursement of over-the-counter drugs and medicines is almost here!

As a reminder, the Health Care Reform Law (the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010) amended the Internal Revenue Code. For expenses incurred on or after January 1, 2011, a medicine or drug is an eligible medical expense only if the medicine or drug: (1) requires a prescription; (2) is available without a prescription but the individual has a prescription; or (3) is insulin. This change applies to health care flexible spending accounts, health reimbursement accounts, health savings accounts, and Archer medical savings accounts.

Cafeteria plans with health care flexible spending accounts may need to be amended to address this limitation. Under IRS Notice 2010-59, any such amendments must be adopted no later than June 30, 2011. Additionally, employers allowing the use of debit cards for health care flexible spending accounts must address the substantiation requirements related to this change.

Check your plans now to see if you need an amendment!

Source: Employee Benefits & Executive Compensation Alert