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Lawmaker Goes to Bat for Plan Administrators

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Rep. Earl Pomeroy, D-N.D., is asking the U.S. Treasury Department to explain how it will interpret the new health account drug reimbursement rules.

The Affordable Care Act, the federal legislative package that includes the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act, includes a provision that will require holders of many types of personal health accounts to get a prescription for an over-the-counter medicine from a doctor before they can use account funds to pay for the OTC medication.

The provision, which is set to apply to OTC drug purchases made on or after Jan. 1, 2011, is best known for its effect on holders of flexible spending accounts, but it also will affect holders of health savings accounts and health reimbursement arrangements.

The Employers Council on Flexible Compensation (ECFC), Washington, has been one of the groups working to promote awareness of the provision and persuade federal agencies to interpret it as narrowly as possible.

Pomeroy, D-N.D., co-chair of the House Rural Health Care Coalition, has written to Treasury Secretary Timothy Geithner to ask him to work with consumer groups and other stakeholders to address compliance issues before Jan. 1, 2011.

“I have heard from employee benefit administrators in my state of the challenges they are facing in making the appropriate system changes necessary to comply with this new requirement by the rapidly approaching deadline,” Pomeroy has written to Geithner, according to a copy of the letter posted on the ECFC website.

Some administrators and retailers may have to suspend use of electronic systems in mid-November, when they expect to be busiest, or else wait until the end of the year, and face the possibility that they will not be prepared to serve health account holders in 2011, Pomeroy says.

“Under either scenario, consumers are left confused and frustrated and benefit administrators and retail merchants will be left with increased processing and consumer service costs,” Pomeroy says.

Administrators and employers also need to know just how regulators will define “prescribed” drug, Pomeroy says.

The definition ought to include a letter of recommendation from a medical practitioner, not just a formal prescription form, Pomeroy says.