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The Patient Protection and Affordable Care Act
Provisions Impacting Self-Funded Employers and their Employees
CHANGES TO CONSUMER DRIVEN HEALTH PLANS
Increased Penalties for Unqualified HSA & MSA Distributions
The tax penalty on those under the age of 65 for HSA & MSA withdrawals to purchase non-qualified medical expenses is increased to 20%.
Unless prescribed by a provider, over-the-counter medications are no longer qualifying medical expenses.
Effective date – 2011
Limitation of FSAs
Contributions to Flexible Spending Accounts under cafeteria plans are limited to $2,500 per-year. Allowable amounts will be indexed by CPI-U each year.
The cap does not apply to an FSA that is not part of a salary reduction arrangement under a cafeteria plan.
Unless prescribed by a provider, over-the-counter medications are no longer qualifying medical expenses.
Effective date – 2013
(Please note: This document was produced by the Self-Insurance Institute of America to provide an overview of the Patient Protection and Affordable Care Act, as modified by the Health Care and Education Reconciliation Act. It does not cover every aspect of the legislation, and certain provisions of the law may change or be modified by additional rules and regulations. This document does not constitute legal or tax advice.)