Health care reform will impact companies offering medical reimbursement arrangements such as HSAs, HRAs or FSAs with the establishment of new restrictions on over-the-counter (OTC) medicines and drugs purchased after December 31, 2010. Unless individuals have a written prescription from their physician, they may no longer be reimbursed for over the counter drugs.

Health Reform is adding reporting requirements for employers on Form W-2s with Section 9002 of the PPACA. Beginning in 2011, employers will be required to include the aggregate cost of employer-sponsored health insurance coverage on every employee’s W-2 form. The cost will not be included in the employee’s taxable income. Rather, the intent of the W-2 reporting is to track benefit values for the 40% excise tax on Cadillac plans beginning in 2018.