No double dipping for OTC contraceptives

This summer, reproductive care is still top of mind for many Americans and benefits administrators. As HR professionals work to understand the nuances of the recent United States Supreme Court (SCOTUS) decision in Dobbs v. Jackson Women’s Health (Dobbs), our team is here to keep you informed of related developments.

The Biden administration issued guidance clarifying how cost sharing and reimbursement works for over-the-counter (OTC) contraceptives. While it’s nothing new per se, it’s good to revisit the rules. Here’s what you need to know.

OTC contraceptive guidance

On July 28, 2022, the Departments of Health and Human Services (HHS), Labor (DOL), and the Treasury (collectively, the “Agencies”) released new guidance on contraceptive coverage. The Frequently Asked Questions (FAQs)¹ clarify that the Affordable Care Act (ACA) guarantees contraceptive coverage at no additional cost “no matter where someone lives or works.”

The FAQs largely reiterate previous guidance. So why the clarification now? The move seems to underscore the Biden administration’s response to Dobbs with direction to promote awareness of current reproductive healthcare rights—including contraceptive coverage requirements in the ACA.

How does this relate to spending accounts?

In the newest set of FAQs¹ (specifically, numbers 5 and 6 on pages 7 to 8), the Agencies repeat that health Flexible Spending Accounts (health FSAs), Health Reimbursement Arrangements (HRAs), and Health Savings Accounts (HSAs) may reimburse expenses incurred for OTC contraception without a prescription to the extent that the cost is not paid or reimbursed by another plan or coverage. Therefore, individuals participating in a heath FSA, HRA, or HSA cannot seek reimbursement for the cost—or portion thereof—of contraceptive care that is paid by a plan or issuer.

Communicate and share the news

To help keep accurate information flowing, the Agencies recommend that plans and issuers advise individuals not to seek reimbursement from a health FSA, HRA, or HSA for the cost (or portion of the cost) of OTC contraceptives paid or reimbursed by the plan or insurer.

As an additional safeguard, the Agencies recommend not using a health FSA, HRA, or HSA debit card to purchase OTC contraceptive care for which the individual intends to seek reimbursement from the plan or issuer.