Health Flexible Spending Accounts

The Health Flexible Spending Account (HFSA) is one of the provisions in the Patient Protection and Affordable Health Care Act (PPACA) and the Health Care and Education Reconciliation Act (HCERA) that will become effective within the next calendar year. This provision will affect AlaskaCare employee and retiree members differently.

AlaskaCare Employee Health Plan

Effective January 1, 2011, OTC drugs and medicines may be reimbursed from your HFSA only if the claim is accompanied by a written prescription from a healthcare provider who is licensed to prescribe drugs. Certain items are exempt from this requirement including:

  • Insulin
  • Items that are not drugs or medicines
  • Medical equipment such as crutches
  • Medical supplies such as bandages
  • Diagnostic devices such as blood sugar test kits

AlaskaCare Retiree Health Plan

The HFSA provision of the federal law does not apply to the AlaskaCare Retiree Health Plan because there is no HFSA available to AlaskaCare Retiree members.

Summary of Revenue Provisions Affecting HFSAs

  • OTC drugs will no longer qualify for purposes of distributions/reimbursements under HFSAs without a written prescription from an appropriately licensed healthcare provider.
  • Contributions to an HFSA under a cafeteria plan will be limited to $2,500 per year, indexed for inflation after 2013. This provision will be effective January 1, 2013. (Currently the AlaskaCare HFSA allows elections up to $5,000.)

Legal Citation