2011: Flex Accounts Not So Flexible
November 16, 2010, 6:10 PM
SIOUX FALLS - If you haven't enrolled in your employer offered health care benefits for next year, you'll likely be doing that soon.
And if a flexible spending account is offered, you'll want to make sure and read the fine print. That's because a big change is coming for 2011.
Since late September, thousands of Sanford employees across the region have been meeting one on one with benefit enrollers deciding their benefit needs for 2011.
One of those may be a flexible spending account. Every year, millions of people set aside hundreds to thousands of dollars for things like co-pays, glasses, and over-the-counter drugs.
“Where the savings really comes in is you have that money taken out of your paycheck, but it's taken out pre-taxed. So you're not taxed on those dollars,” said Jodi Olson, Director of Benefits at Sanford Health.
But that flexible spending account won't be so flexible come January first. Next year, you'll no longer be able to set aside pretax dollars for over-the-counter medicines.
“In 2011, for over-the-counter drugs and medicine, it's actually going to require a physician prescription that it didn't before,” Olson said.
But Sanford Health Director of Benefits Jodi Olson, says there is a loophole. If you want to claim drugs like Tylenol or Claritin, a doctor can simply write a prescription for it.
“Sometimes a physician may suggest using an over the counter item before they go into an actual prescription. But they're gonna have to put that on a prescription to get reimbursed by a flex plan,” said Olson.
Sanford Health employee Mary Beth Pudwill says she likes putting money into a flex account.... even if there's a use it or lose it policy.
“We have 4 children so up until recently I never had that problem. Somebody was always needing care somewhere,” Pudwill said.
Pudwill says despite the changes, a flexible spending account is a good benefit.
“If you know you were gonna do like a laser surgery, you know how much that's gonna cost. You could flex that out at the beginning of the year and that would be a huge savings,” said Pudwill.
Even though many workers aren't against the change, those who make and sell over the counter drugs are. Now the National Association of Chain Drug Stores and some lawmakers are asking for either a delay in the new restrictions or a repeal all together.
And there's one more change coming to your medical flex account. In 2013 you'll be limited in the amount of money you can save pre-taxed to 2,500 dollars a year.
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