Insurance items
By now, most everyone is aware of the recent passage of the health care reform law (Affordable Care Act). Included in the law are some new requirements that will affect your Unreimbursed Medical Expense Account. Below is an overview of these requirements and when the changes will be implemented.
Effective January 1, 2011, in order to be reimbursed for over-the-counter drugs and medicines purchased on or after this date, the participant must provide a medical practitioner's prescription for the item(s). American Fidelity will require a new prescription be submitted as we will not be able to use any information that may have been previously provided (doctor's statements will no longer be accepted). The prescription must be legible and will be valid for one year from the date of issue. It must include the same information as required for a drug or medicine that is available by prescription only.
This normally includes:
1) The name and address of the patient;
2) The name and quantity of the drug prescribed and directions for use;
3) The date of issue;
4) The name, address, and phone number of the prescriber,
his or her license classifi cation, and his or her federal registry number;
5) A description of the condition for which the drug is being prescribed;
6) The signature of the medical practitioner issuing the order.
It is not clear at this time how the new law will affect over-the-counter items that do not fall into the category of drug or medicine (such as bandages, reading glasses, sunscreen, hot/cold packs, hearing aid batteries, etc.). The Internal Revenue Service has stated that they are working on
clarifi cation that will be available in the near future, but the exact date of this guidance is not known. Until further clarifi cation can be provided, participants should carefully calculate the amount of contributions placed into the Unreimbursed Medical Expense Account for over-the-counter items. The IRS will not allow the participant to change their election as a result of this new requirement.
On September 3, 2010, the Internal Revenue Service issued IRS Notice 2010-59. This notice provides guidance to the rules under the Patient Protection and Affordable Care Act (PPACA) with respect to the reimbursement of over-the-counter medicines and drugs from employer provided health reimbursement plans such as health flexible spending arrangements (HFSAs), health reimbursement arrangements (HRAs), health savings accounts (HSAs) and Archer Medical Savings Accounts (Archer MSAs).
THE GENERAL RULE UNDER PPACA
Beginning January 1, 2011, expenses incurred for medicines or drugs may be paid or reimbursed from an employer provided health reimbursement plan only if (i) the medicine or drug requires a prescription, (ii) is available without a prescription (i.e. an over-the-counter medicine or drug) and the individual obtains a prescription, or (iii) is insulin. Amounts distributed from a health savings account or Archer Medical Savings Account for any medicine or drug that does not meet these requirements will be treated as distributions for nonqualified medical expenses, which are includable in the employee's gross income and generally subjected to a 20% additional excise tax.
Distributions made after December 31, 2010 for expenses incurred for over-the-counter drugs prior to January 1, 2011 may be reimbursed tax-free.
DEBIT CARDS AND OVER-THE-COUNTER EXPENSES
After December 31, 2010, a person may be reimbursed for over-the-counter medicines or drugs that have been purchased with a prescription, but the purchase should not be made with a HSA debit card. Debit card systems are not capable of recognizing and substantiating that medicines or drugs were prescribed. This change is effective January 1, 2011 but the IRS will not challenge any purchases made with a debit card prior to January 15, 2011 for those purchases that comply with current IRS regulations, notices and revenue rulings. Debit cards may continue to be used for medical expenses other than over-the-counter medicines and drugs.
Effective January 16, 2011, over-the-counter medicine or drug purchases at all providers and merchants must be substantiated before reimbursement may be made. In order to be substantiated, the prescription (or other documentation that a prescription has been issued) for the over-the-counter medicine or drug, and other required information from an independent third party, must be submitted.
For example, a customer receipt issued by a pharmacy which identifies the name of the purchaser (or the name of the person for whom the prescription applies), the date and amount of the purchase and Rx number satisfies the substantiation requirements. Submission of a customer receipt without an Rx number but accompanied by a copy of the related prescription will satisfy this requirement as well.
Health Care Reform: September2010
Changes to OTC Drugs as Reimbursable Expenses
Until further guidance is issued it appears that Health FSA and HRA debit cards may be used at pharmacies that do not have an inventory information approval system (IIAS) if 90 percent of the store's gross receipts (for the previous year) consists of items that qualify as expenses for medical care. Proper substantiation is also required.
CONTINUED REIMBURSABLE EXPENSES
Notice 2010-59 confirms that expenses for items that are not medicines and drugs that were previously reimbursable continue to be reimbursable expenses. Expenses for equipment, supplies and diagnostic devices including crutches, bandages, blood sugar test kits, etc., will be reimbursable when they satisfy the definition of "medical care" expenses (e.g., expenses for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body, etc.). However, expenses for items that are merely beneficial to the general health of an individual, such as expenses for a vacation, are not expenses for medical care.
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After September 20, 2010, all members who now obtain specialty medications from PrecisionRx Specialty Solutions (PRxSS) will obtain them from CuraScript, the Express Scripts specialty pharmacy. We will continue managing specialty pharmacy drug programs and will continue to provide a dedicated account service team. Members will keep their existing ID cards and numbers, Customer Service phone numbers, drug lists and benefit designs. However, specialty pharmacy members and website users will experience some changes upon migration.
What Isn't Changing:
- CuraScript order processing times are very similar to the member experience with PRxSS. Rather than targeting a turnaround time, CuraScript targets a required patient delivery date
- PRxSS will transfer to CuraScript any prescriptions that have remaining refills on active prescriptions less than one year old. The member will be able to place the refill orders online or by phone
- Members taking specialty medications should continue to use the same phone number (800-870-6419) and email address (specialtycustomerservice@express-scripts.com) they use today.
- All customer service hours remain the same
- Health plan-specific specialty drug lists remain the same.
What's Changing:
- Existing specialty pharmacy customers may notice changes to the automated phone system.
- The color and layout of paperwork in order packages from CuraScript will differ from what PRxSS used
- Customers may notice that their prescriptions are being filled at any of the three main CuraScript facilities (Indianapolis, IN, Orlando, FL, or New Castle, DE), but prescriptions could also be filled by other, smaller CuraScript facilities
- CuraScript will be the brand on all specialty pharmacy packages, label names and practice of pharmacy communication.
- CuraScript will offer its CareLogic clinical programs to transitioning PRxSS patients; these programs include those that PRxSS offers today.
Web Experience
Members may access our website for specialty pharmacy information and online tools. If they currently use our website to access their health plan information, they can now review their specialty pharmacy information there as well. After September 20, though, when they view their pharmacy information through our website, they will be redirected to the Express Scripts website and may be asked to provide registration information. This information will be used to manage their pharmacy benefits and preferences for communication and privacy.
Through our website, members will be able to use many of the web enhancements listed below to help them better manage their specialty medications:
- Review up to 18 months of prescription history
- Schedule refills for certain specialty medications (some medications require the patient to call)
- See when orders have shipped or are processing
- Choose from a variety of payment methods
- Set required delivery date for specialty medications
- Order supply kits, if needed
- View specialty and home delivery medications, if applicable, filled by Express Scripts on the same web page
The PRxSS website, precisionrxspecialtysolutions.com, will be retired after September 20, 2010. Those who visit precisionrxspecialtysolutions.com after that date will be re-directed to curascript.com.
Member communications
Beginning September 3, current PRxSS customers will be sent mailings, which include Frequently Asked Questions, to explain the transition.
Background
In late 2009, our parent company completed a deal to sell its NextRx pharmacy benefit management subsidiaries - including PrecisionRx Specialty Solutions, the specialty pharmacy - to Express Scripts, and subsequently entered into a contract with Express Scripts to provide certain operational and administrative support for our prescription drug plans. As a result, customers will gain the advantage of best-in-class programs from both organizations and integration of their medical and pharmacy benefits from leaders in their respective fields.
If you have questions, please feel free to contact your sales representative.