Employee Benefits E-lert -- Benefits Update on FSA or HRA (September 2009)

This update should be of interest to all employers that offer a health flexible spending account ("health FSA") or health reimbursement arrangement ("HRA"). As you hopefully realize, such employers are responsible for only reimbursing valid medical expenses. A medical expense is valid if it is incurred for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting a structure or function of the body. A recent IRS letter discusses when over-the-counter (OTC) medications qualify as medical care expenses that can be paid or reimbursed by a health FSA or an HRA.

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If you have any questions about the attached letter or want assistance in determining whether a particular expense is reimbursable, please do not hesitate to contact:

Lowell J. Walters
GrayRobinson, P.A.
Tampa, FL 33602
Phone: (813) 273-5000
lowell.walters@gray-robinson.com