Friday, June 3, 2011

Employers must amend cafeteria plans to comply with restrictions on reimbursement for OTC drugs

As a reminder, cafeteria plans that contain an FSA which provides for reimbursement of over-the-counter medicines or drugs must be amended to restrict such reimbursement to prescribed drugs or insulin by June 30, 2011. Although the new law applies to drugs purchased after December 31, 2010, an employer may amend its cafeteria plan to conform to the new law no later than June 30, 2011. The amendment must be retroactive to January 1, 2011. See IRS Notice 2010-59 for more details.

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