Please read the following carefully as it affects the scope of expenses that may be reimbursed under your Health Flexible Spending Account (Health FSA).
The IRS recently issued a Revenue Ruling that allows Health FSAs to reimburse many drugs that you purchase over the counter to treat a specific medical condition or injury. Prior to the ruling, Health FSAs could only reimburse expenses incurred for prescription drugs. We have decided to amend the Health FSA to take advantage of the IRS' ruling. Attached is a Summary of Material Modifications (SMM) that provides a new definition of "eligible medical expenses" that includes OTC drugs in its scope. You should keep a copy of the SMM with your Health FSA Summary Plan Description (SPD).
Before you purchase an OTC drug for which you plan to seek reimbursement, you should remember that the OTC drug must be for "medical care" as defined by the Internal Revenue Code. An OTC drug is for "medical care" if it is needed to treat a medical condition and is generally accepted as falling within the category of "medicine or drugs". Items that are merely beneficial to the general health of the individual are not for "medical care" and are not reimbursable (e.g. vitamins, nutritional supplements); however, even these drugs, when taken at a doctor's suggestion to treat a specific medical condition may be eligible. In addition, the third party substantiation that you provide must identify the name of the OTC drug that was purchased and, in some cases, the claims or plan administrator may need to ask for substantiation showing the reasons the drug was purchased (e.g. in situations where the OTC drug can be taken for both general health and to treat a specific medical condition). The claims administrator (subject to the final discretionary authority of the Plan Administrator) will determine, in light of the relevant facts and circumstances, whether an OTC drug is for "medical care."
Per IRS regulations, you may NOT change your annual Health FSA election as a result of this change in the Health FSA.
If you have any questions about this new rule, please contact Wanda Housand in the CSU human resource department at (843) 863-8070.
Jobs at CSU ... 
