Here are a few key points:
- Over the Counter drugs and medicines are now eligible for reimbursement permanently
- Menstrual care products are now considered part of the expanded list of OTC items, which includes a "tampon, pad, liner, cup, sponge, or similar product used by individuals with respect to menstruation"
- This change is effective for expenses incurred on or after January 1, 2020
We are ready today to support manual reimbursement of claims for these expenses, however, full roll-out utilizing our HG Advantage Card requires SIGIS (the group responsible for the development and management of an industry standard to meet IRS requirements), and merchants to take action. The key driver behind the change will be the availability of an updated list of eligible products from SIGIS and the implementation of that list by participating merchants. SIGIS is starting the process to create the list and is working closely with its members to complete this task. We anticipate that SIGIS and merchant implementation of the new eligible item list will occur gradually within 4-6 weeks.
All of this will undoubtedly result in inconsistencies in shopping experiences for your employees. For example, OTCs may be allowable the HG Advantage Card at one merchant, but not another, as the industry makes this important transition. We expect any issues like this to be temporary and resolved in a fairly short time frame.
From our standpoint, the administration of your plans will require no new configuration for this change to be effective. Any plans that currently cover OTC items such as saline solution and medical supplies, will provide coverage for the expanded OTC items as soon as the merchants complete implementation.
It is important to note that starting immediately, OTCs may be submitted to us for manual claims processing via online, mobile or paper form.
We are extremely excited about this change and the opportunity to provide affordable access to OTC items via tax advantaged benefits for our clients.
As always, we appreciate the opportunity to be of service to you.
Richard H. Miller, Jr., CPA