Code Section 106

Code Section Effective Date Name of Act Name of Provision 10yr Revenue Estimate ($millions)
105, 106, 220 and 223 12/31/2010 Patient Protection and Affordable Care Act Distributions for Medicine Qualified Only if for Prescribed Drug or Insulin 5,000

Distributions for Medicine Qualified Only if for PrescribedDrug or Insulin

Explanation of Provision

Under the provision, with respect to medicines, the definition of medical expense for purposes of employer-provided health coverage (including HRAs and Health FSAs), HSAs, and Archer MSAs, is conformed to the definition for purposes of the itemized deduction for medical expenses, except that prescribed drug is determined without regard to whether the drug is available without a prescription. Thus, under the provision, the cost of over-the-counter medicines may not be reimbursed with excludible income through a Health FSA, HRA, HSA, or Archer MSA, unless the medicine is prescribed by a physician.

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