Under the Patient Protection and Affordable Care Act (PPACA), reimbursement for “qualified” medical expenses under HSAs and FSAs will be restricted to medications that are prescribed. This means that, unless a physician prescribes over-the-counter drugs, plan participants will no longer be able to be reimbursed for them. This provision is effective January 1, 2011.
Currently, if HSA account holders use money in their accounts for medical expenses that are not “qualified” they are assessed a 10 percent tax. Beginning in 2011, this goes up to 20 percent.