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HCR Update: Preventive Care Flyer, Spending Accounts, Annual Limits Waivers

Oct 12, 2010

Health Care Reform Update

October 8, 2010


The preventive health care services flier is ready 

You can now order printed copies of the preventive health care services flier for employers and members. 

Based on the health care reform law and guidelines related to the law prepared by the Blue Cross and Blue Shield Association and America's Health Insurance Plans, we expanded the list of services we cover. We've created a helpful flier with all the details. 

Contact your account representative to get your copies today.


How health care reform is changing health care spending accounts 

The health care reform law is affecting the following health care spending accounts:

  • Health care flexible spending account (FSA)
  • Health reimbursement arrangement (HRA)
  • Health savings account (HSA)
  • Archer medical savings account (MSA) 

The changes can be seen in two major areas: 

Tax penalty increase for nonmedical HSA and MSA distributions 

Money removed from an HSA or MSA and not used on qualified medical expenses will be taxed 20%. That's an increase of 10%. This change begins for disbursements made during tax years starting on or after January 1, 2011.  

Prescriptions required for reimbursement of over-the-counter (OTC) drugs 

Members can use health care spending account funds for OTC medicine or drugs as long as they have a prescription written by a doctor in the state where the medicine or drugs are purchased. This rule does not apply to insulin. This change starts January 1, 2011, for all plans regardless of the plan year dates. 

Review our detailed fact sheet on these changes to learn more.

Groups can request a waiver to keep annual limits 

The health care reform law includes a provision that restricts the use of annual limits on the dollar value of essential health benefits. But plans can apply for a waiver if complying with the provision would:

  • significantly decrease the access to benefits, or
  • significantly increase premiums 

This provision applies to grandfathered and nongrandfathered group plans. We will provide groups with data and information to complete the waiver. Learn more about the waiver program by reviewing our fact sheet.

Getting to the bottom of your health care costs     

Did you know: Cost of an emergency room visit rises with age?

On average, the total cost of a trip to the emergency room was $1,038 in 2007 with costs increasing in older patients, according to a Medical Expenditure Panel Survey study of emergency room cost (reported by For people ages 45 - 64 during the same period, the average cost jumped nearly 50% to $1,539.

This content is provided solely for informational purposes: it is not intended as and does not constitute legal advice. The information contained herein should not be relied upon or used as a substitute for consultation with legal, accounting, tax and/or other professional advisers.

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