Marsha Barnes, CEO and founder of The Finance Bar, and Taylor Holgate, Director of Government Affairs at the Consumer Healthcare Products Association, explain why patients are often not familiar with their pre-tax funds and discuss recent steps taken recently that are aimed at helping Americans better manage their health, as well as finances, during the current pandemic.
Please introduce yourselves and share a bit about your backgrounds.
Taylor Holgate: Thank you for taking the time to speak with us today. I am the director of government affairs with the Consumer Healthcare Products Association. We represent the nonprescription medicine industry—so everything that you think of as a medicine that you can pick up off the shelf at any big retailer. Antacids, pain relievers, those things you have in your medicine cabinet to solve your everyday aches and pains.
At the Consumer Healthcare Products Association, we have for a long time been working to restore a really important consumer benefit that will allow consumers to use their pre-tax health savings account (HSA)and flexible spending account (FSA) dollars on over-the-counter medicines. We are excited that that was included in a piece of legislation passed by Congress this spring. We are trying to spread the word to consumers so that they can make the most of their healthcare benefits.
Marsha Barnes: I am a financial social worker and financial educator. I am also the founder of The Finance Bar, where we offer direct coaching to women and couples and provide online resources to help our audience move from financially existing to financially thriving.
Can you briefly highlight why patients are often not familiar with their pre-tax funds?
Ms Barnes: So these accounts are actually highly valued by the younger workforce. About 77% of the HSA contributors belong to Generation X, millennials, and Generation Z who earn, on average, an income of $57,060 per year.
I would add, though, that many Americans just simply are not aware that HSAs are not governed by a use it or lose it policy which applies to FSA accounts or how they can simply leverage these benefits associated with both of them by effectively planning ahead. Let me tell you that, without a doubt, that this is why our conversation today is so valuable in making Americans with FSAs and HSAs aware that they can now use their pre-tax funds toward menstrual care products and over-the-counter medicines. That saves them both time and money.
I am sure that many consumers are familiar with their tax-pre-funds, but they are not aware of how they are able to use them and how it can benefit them in the long run.
Ms Holgate: To add to Marsha’s answer, people usually think about their employer benefits when they change jobs or at the end of the year when they’re making decisions about—Are the programs I’m currently enrolled in the right programs for me going forward? Is this meeting my needs?
What we have in this circumstance is a mid-season change where there has been some changes to people’s benefits where they have extra choices. They have new choices they didn’t have before. That is great news, but people just might not know because it’s not the season when they’re usually thinking about these things.
I don’t know about you, but the newsletter from my health insurance company is not my favorite email to open. I don’t necessarily open it every month when it comes. People might have missed out on this information.
Americans have many things to worry about and are not necessarily paying attention to changes in HSA policy. We are excited to be spreading the word to consumers so that they can make the most of this policy change.
How can pharmacists specifically, as well as other health care professionals, help ensure patients are utilizing these pre tax funds from their flexible spending arrangements or HSAs in order to purchase over-the-counter medicines and menstrual care products?
Ms Holgate: Pharmacists are really the front line of health care. Consumers often encounter them in a retail setting. That is a perfect place to have this conversation. If pharmacists are making recommendations to a consumer or to a patient, this is something to add to the list.
“Did you know that this was now an HSA eligible product? You can pick it up off the shelf but it is still health care. It is still part of your health care plan if you have an HSA or an FSA.”
Can you discuss other steps recently taken aimed at helping Americans better manage their health and finances during the current pandemic?
Ms Barnes: Absolutely. More companies are stepping up their mental health benefit offerings for employees. These include changes in employee assistance programs, discounts on mental health apps, and even more virtual service options.
There are also many companies that are now offering financial wellness assistance to their employees with things like online tools and resources. Then, over-the-counter medicine and menstrual care product eligibility in FSAs and HSAs is a meaningful step towards not only improving health care access, but also affordability, which is beneficial and an overall win for Americans.
Ms Holgate: Additionally, the restoration of this benefit helps people with social distancing. Previously, consumers could use their HSA and FSA money on over the counter medicines, but they would have to first get a prescription from the doctor.
Number one, that’s a big inconvenience, but at a time when people are concerned about avoiding crowds and keeping their distance from others, that’s another stop along the way that you don’t necessarily need to be making.
The great benefit of over the counter medicines is that they’re accessible and that you don’t need to go through a doctor in order to use them. It was a weird quirk of how legislating happens sometimes that over-the-counter medicines ended up with this prescription requirement for HSA and FSA plans.
It is a huge win for convenience and for social distancing that consumers don’t have to jump through those hoops anymore.
What other challenges do patients face when paying for their medications and other services? What can health care professionals do to improve those challenges?
Ms Holgate: Health care costs cause a lot of stress for a lot of people. Recent data shows that 9 of 10 people are feeling stressed over their health care costs. Understanding what is in your plan and what benefits you have are important tools that consumers have to mitigate that stress.
There are people right now who are experiencing unemployment. There are others who may be experiencing less stability in their employment. There are a lot of factos in the world that we cannot control that we would like to control., which results in a lot of stress.
I do not have a crystal ball. I do not know what the future looks like, but if you understand what tools you do have in your toolbox, whether it is an HSA, or a FSA, or just better understanding your benefits, that is going to give you some more certainty and some more control over your situation going forward.
Ms Barnes: I want to also add to Taylor’s point that if you know the options that you have in your toolbox, then that means that you are just more educated on what you are able to utilize.
I also believe that one thing that health care professionals could do is to provide educational pamphlets around their office. Oftentimes when you visit the doctor there are pamphlets and resources around financing that they may offer.
I do believe that there are educational tools around the doctor’s office that’s presented to them when they check in or when they check out. That is another layer of awareness that patients can have.
The more you know, the more you’re able to utilize—to Taylor’s point—what you have in your toolbox.
Ms Holgate: Consumers cannot make good decisions if they do not have good information. We are working on the information part, trying
to spread the word.
The Consumer Healthcare Products Association has a brand-new website that helps consumers and medical professionals understand this change. The wesbite is taxfreeotc.org and it contains a plethora of resources.
However, if people have questions about their specific plan or their specific benefits, the best resource for them is going to be their benefits provider or their human resources department.
We are running a digital campaign so that the people who might not be paying as much attention to their insurance newsletters get the word out about this new benefit that they can use.
Is there anything else you would like to add?
Ms Barnes: If there is one thought that I could leave you with today, it is this. The ability to now use FSAs and HSAs to pay for over-the-counter medicines and menstrual care products allows consumers to now shift those funds in their budget from personal care expenses that they would normally have to utilize those funds for to their savings account, which is now a huge benefit.
A lot of Americans are looking for ways to maximize their savings account or to get more money in there. You’re able to now do this by addressing your health care needs and keeping more money in your pocket. That’s a huge deal in general for Americans.
Ms Holgate: What Marsha so perfectly highlighted are the benefits, the perk to any individual’s personal finances and their own personal, both health and financial wellness—over-the-counter medications are also a huge savings to the
health care system and the economy in general.
When people can manage their health care needs and stay well using OTCs, that saves the economy in general $146 billion in additional health care costs and productivity loss.
Over-the-counter medications are an unsung hero of the health care system. They are there for you when you need them. They are easy to access. Now, they are included in many people’s health