The New Health Care Law and Flexible Spending Accounts

The new prescription rule applies to over-the-counter medicines except for purchases of insulin, says Sandra Salstrom, a Treasury Department spokeswoman.

One reader asked whether the doctor's prescription must also indicate what diagnosis or medical condition the over-the-counter drug will be used to treat. The new rule does not require that the prescription contain a diagnosis. But if you live in a state that requires all prescriptions to include a diagnosis, then your FSA prescription would have to comply with state law.

While there is no legal limit now on how much money you can put into a flexible spending account, that's going to change. The health reform law will limit contributions to a maximum of $2,500 starting in 2013. That limit increases over time with inflation and applies regardless of whether the account is used by an individual or a family. Still, the limit shouldn't affect many people because it is set at about double the average contribution. The provision is expected to generate as much as $18 billion in additional tax revenue over the next decade.

Although the new rule may be inconvenient, it may have some positive side effects, says Steve Findlay, senior health policy analyst at Consumers Union. Asking your doctor for a prescription provides an opportunity to discuss whether you should take, for example, an aspirin every day to protect your heart. Some over-the-counter drugs taken over long periods of time have the potential for harm, he adds.

"Unfortunately, people are taking over-the-counter medicine that they don't need to take," he adds.

Susan Jaffe of Washington, D.C., covers health and aging issues and writes the Bulletin’s weekly column, Health Care Reform Explained: Your Questions Answered.