Poll: Companies to Allow OTC Drug Purchases

October 1, 2003 (PLANSPONSOR.com) - Virtually all large companies participating in a recent survey said they would allow employees to pay for over-the-counter drugs with money from their health care flexible spending accounts (FSA).

The poll by the Washington Business Group on Health (WBGH), found those plans to go along with a recent Internal Revenue Service (IRS) ruling at 70 of the 72 large companies surveyed. Some 56% said their new rule would take effect January 1, 2004, while about 15% used a retroactive effective date of January 1, 2003 or September 3, 2003. The IRS allowed the move in a September 3 announcement (See FSA Paybacks Now Cover Non-Prescription Drugs ).

“This is great news for employees since most over-the-counter drugs aren’t typically covered by health insurance plans,” said Helen Darling, WBGH president, in a statement. “But equally important, employers are making room in their health benefits budget to cover more drugs that are medically necessary but also expensive. Also, many retail stores have special sales for products that people pay a lot of attention to or buy frequently so employees may get even better buys if they watch the ads.”

The WBGH poll also found that:

  • Two thirds (66%) of employers will communicate the new policy to their workers during the annual open enrollment period; nearly half (47%) will also use the company intranet for plan education.
  • About three-fourths (73%) of respondents said their FSA plan administrators are prepared to handle the additional claims from the new ruling.
  • Fewer than half (48%) don’t know whether their FSA administrators will charge additional fees to handle extra claims; 45% said they won’t.

For more information, go to http://www.wbgh.com .