Frequently Asked Questions

1. Is a letter of medical necessity acceptable to meet the doctor's prescription requirement for over the counter drugs and medications?

No. The only acceptable form of documentation for reimbursement for OTC drugs and medicines is a doctor's prescription, as regulated by state law. A letter of medical necessity will not be acceptable.

2. What are OTC items that will require a doctor's prescription?

Though not all inclusive, the following are examples of items that will require a doctor's "prescription":
*Acid Controllers *Digestive Aids
*Allergy & Sinus *Feminine Anti-Fungal/Anti-Itch
*Antibiotic Products *Hemorrhoidal Preps
*Anti-Diarrheals *Laxatives
*Anti-Gas *Motion Sickness
*Anti-Itch & Insect Bite *Pain Relief
*Anti-Parasitic Treatments *Respiratory Treatment
*Baby Rash Ointment *Sleep Aids & Sedatives
*Cold Sore Remedies * Stomach Remedies
*Cough, Cold & Flu Medications

3. What is the definition of "prescription" that is required for Over The Counter (OTC) beginning January 1, 2011?

“Prescription “ means a written or electronic order for a medicine or drug that meets the legal
requirements of a prescription in the state in which the medical expense is incurred and that is issued by an individual who is legally authorized to issue a prescription in that state.

The "prescription" must conform to the requirements of the state in which the OTC item is incurred (purchased), so care must be exercised to know the definition of a "prescription" per the appropriate state.

4 What OTC items will not require a doctor's presciption after 1/1/2011?

Though not all inclusive the following items and categories of OTC supplies will not require a doctor's prescription in order to be eligible under your Flexible Spending Account program. Your CBI FLex card can continue to be used for purchase of these items:

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

2. Our plan year is 4/1/2010 to 3/31/2011. Will the new OTC rule start for us on 1/1/2011 or on 4/1/2011 when our plan renews?

The new OTC rule goes in to effect on 1/1/2011 for all plans regardless of plan year dates.

3. Will Section 125 Flexible Spending Accounts (FSA's) and Health Savings Accounts (HSA's) have mandatory matching contributions? If so what would that be?

There is not a mandatory match for these plans. The voluntary employer match of pretax employee contributions would only exempt the group from non-discrimination testing. The voluntary match is useful if the group is in danger of being out of compliance for testing purposes and wants to continue to offer the plan(s) to all participants, both highly compensated and non-highly compensated employees.

4. What is the minimum employer matching contribution amount or percentage for the Safe Harbor provision to apply to a cafeteria plan?

Employer contributions to a simple cafeteria plan must be sufficient to provide benefits to non-highly compensated employees (NHCEs) of at least:

• A uniform percentage (at least two percent) of compensation, whether or not the employee makes salary reduction contributions to the plan; or


• The lesser of a 100% matching contribution or six percent of the employee's compensation

5. Is there a cap imposed on medical FSA’s and when does that become effective?

Yes, a maximum of $2500 per plan year beginning 1/1/2013. Employer contributions do not apply to this cap.

6. Is the maximum election of $2,500 on medical FSA's a maximum per family or per covered individual?

Under Section 125 of the IRC, only the participants (employees) are allowed to make an annual election for their FSA. Therefore, whatever election (annual amount) the employee makes applies to the family as a whole, not to each member.

7. Is it true that Over The Counter items are no longer eligible expense items under my FSA?

No, this is not true. All OTC that were eligible are still eligible. However, effective 1/1/2011 OTC medicines or drugs under a FSA, HRA or HSA must be "prescribed". See FAQ's 0.1, 0.2, 0.3 & 0.4 above for further details.

8. Has CBI updated its Enrollment Booklet to reflect the OTC changes?

Yes, the updated Enrollment Booklet can be found at conceptsinbenefits.com/forms/ then click on FSA Enrollment Booklet for NEW PARTICIPANTS Rev 2010 05 17.pdf". The update is on page 5 of the enrollment booklet.

9. Do 2010 participants have to file all their 2010 over-the-counter receipts for reimbursement on or before 12/31/2010?

OTC items purchased prior to 1/1/2011 can be submitted for reimbursement in accordance with the FSA or HRA plan dictates and restrictions. Claims submitted for reimbursement of OTC purchases beginning 1/1/2011 will require a copy of a prescription as well as a bona fide receipt.

10. Does the 1/1/2011 OTC rule eliminate the purchase of over the counter medications during the Grace Period under the current rules?

Purchases of OTC items during Grace Periods that either extend into 2011 or start 1/1/2011 or later will be subject to the new regulations,therefore a prescription will be required for OTC purchases as of 1/1 2011 regardless.