RX cards with Health Savings accounts
originally posted: 11/22/2006 reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If in doubt, please send a new question or ask for an update.
Q: Can a prescription discount program independent from the HDHP be utilized with an HSA after 1/1/06? Are there any specific guidelines regarding the classification of maintenance drugs as “preventative care” which will allow a specific co-pay based prescription plan to be set up to address this situation? Is the language “Drugs taken by a person who has developed risk factors for a disease that has not yet manifested itself or to prevent reoccurrence of a disease” the controlling factor?
A: Yes, it makes sense to use both together. Health Savings accounts are completely independent of PPO discount cards so there is no interaction between them or restrictions on using both together. The tax treatment of all medical expenses, including prescription drugs, under a health savings account is described in IRS Publication 502. While the allowances are fairly liberal including benefits for preventative care, it makes more sense to consult the actual publication rather than to attempt to describe any logic that is used to determine tax treatment.
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