Q.- I submitted a claim for vitamins to be reimbursed from my health FSA. Why is this being denied? I thought over-the-counter medicines could now be reimbursed from certain FSAs without a prescription.
The Families First Coronavirus Response Act (FFCRA) requires employers with fewer than 500 employees to provide their workforce with paid sick leave and paid family leave for certain reasons related to COVID-19.
The Internal Revenue Service released a Chief Counsel Memorandum advising that the Affordable Care Act’s Employer Shared Responsibility Payment (ESRP) does not have a statute of limitations. This guidance means the IRS may assess an ESRP penalty on an employer at any time and for any tax year. This is not welcome news for employers.
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The Patient Protection and Affordable Care Act (ACA) established a rule that starting January 1, 2011, distributions from health care flexible spending account plans and health reimbursement accounts could reimburse the cost of over-the-counter medicines or drugs only if the items were purchased with a prescription. The Coronavirus Aid, Relief and Economic Security Act (CARES Act) signed into law last week removes the prescription requirement for OTC reimbursements and makes additional items eligible for reimbursement.
Q.- May we let an employee change his Dependent Care FSA election now that he is under a stay-at-home order?
A “furlough” is generally an employer-forced temporary leave of absence after which an employee is expected to return to active employment. The individual is still considered an employee during a furlough. A layoff is a generally a termination of employment where all terms and conditions of employment cease. A layoff could be permanent or temporary, but it is a separation from employment and the individual is no longer an employee.
Q.- My employer offers a debit card with my health FSA. May I use the card to purchase pain relief medicine?
Even in the midst of the COVID-19 pandemic, employers must remember their Affordable Care Act (ACA) obligations. Form 1094-B/C must be transmitted to the IRS by March 31, 2020.
With the change to remote work and the closure of day care facilities, many employees will no longer be able to use funds in a Dependent Care FSA. A Dependent Care FSA allows an employee to set aside up to $5,000, pre-tax, to pay eligible dependent day care expenses. An expense is eligible for reimbursement if the expense is for care for a qualified individual and the expense is incurred in order for the employee (and spouse) to work or look for work.