SPECIAL REPORT: HEALTH BENEFITS SPENDING
New Spending Power A CARES Act provision creates an opportunity for OTC brands and retailers By Seth Mendelson
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ignificant changes in the Affordable Care Act might be a boon for mass retailers and the over-the-counter medications section, as well as the CPG companies that operate in this space. According to industry information, more than 50 million American families have signed up for either the Flexible Spending Accounts, or FSAs, or Health Savings Accounts, or HSAs — programs designed to help pay for medical and dental expenses that fall outside of traditional health coverage. The plans, developed in
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the late 1970s, allowed people to set aside a portion of their income into a pre-tax account to be used for healthcare reasons. The implementation of the Affordable Care Act in 2011 established rules that only reimbursed consumers for OTC drug sales, if purchased with a prescription. In practice, according to a fact sheet supplied to Drug Store News by GSK Consumer Healthcare, that program prevented most people from having the ability to use their FSAs/HSAs to purchase OTC products. Prior to that rule change, about 52% of households with FSA accounts had used those funds to purchase
OTC items at retail. Yet the 2020 Coronavirus Aid, Relief and Economic Security, or CARES, Act — which passed in Congress and was signed into law by President Donald Trump in late March — changed that rule, expanding the list of items eligible for reimbursement by FSAs and HSAs to include over-the-counter medications, as well as many menstrual products. More than 40 OTC categories are included in this, from acid controllers and acne medications to cough-cold and flu and sleep aids. GSK Consumer Healthcare’s fact sheet explained that this is a permanent change,
September 2020 DRUGSTORENEWS.COM
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