Important changes to your Health Savings Account (HSA) for 2011

Phil Lee — Wed, 19 Jan 2011 02:23:13 +0000

If you use your HSA funds to buy over-the-counter items such as allergy and pain-relief medication, fish oil supplements and vitamins. As of January 1st, 2011, you can no longer use your HSA funds to buy over-the-counter medication without a doctor’s prescription.
In addition, you are no longer able to use your HSA money to reimburse yourself for these purchases. You may, however, reimburse yourself for over-the-counter drugs purchased in 2010.

Also, the tax penalty has doubled to 20% of the total withdrawal if you use your HSA funds for non-medical purposes.

These reductions in HSA benefits were brought about by the Health Care Reform Act of 2010, also known as PPACA, Patient Protection and Affordable Care Act or Obamacare.

To read more about over-the-counter purchases and how these changes affect your HSA, visit the IRS website at www.irs.gov and look for IRS Notice, 2010-59.

Lee Health Insurance Services

Important changes to your Health Savings Account (HSA) for 2011