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August24th

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Employers must revise their cafeteria plans for changes taking effect during and after 2011.  Effective for expenses incurred on or after Jan. 1, 2011, health flexible spending accounts (FSAs), health reimbursement arrangements (HRAs) and health savings accounts (HSAs) in cafeteria plans may no longer reimburse for over-the-counter (OTC) drugs unless they are prescribed.   Plan sponsors may also want to take the opportunity to amend cafeteria plans at the same time to adopt the new $2,500 limit on health FSAs, which takes effect Jan. 1, 2013 (but are not required to do so).  Therefore, any cafeteria plan that has been reimbursing OTC drugs will have to be amended by Dec. 31, prospectively, to eliminate reimbursement unless the OTC drug is prescribed for an individual.

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