Section 9003

SEC. 9003. DISTRIBUTIONS FOR MEDICINE QUALIFIED ONLY IF FOR PRESCRIBED DRUG OR INSULIN.

[a] HSAs- Subparagraph [A] of section 223[d][2] of the Internal Revenue Code of 1986 is amended by adding at the end the following: 'Such term shall include an amount paid for medicine or a drug only if such medicine or drug is a prescribed drug [determined without regard to whether such drug is available without a prescription] or is insulin.'.

[b] Archer MSAs- Subparagraph [A] of section 220[d][2] of the Internal Revenue Code of 1986 is amended by adding at the end the following: 'Such term shall include an amount paid for medicine or a drug only if such medicine or drug is a prescribed drug [determined without regard to whether such drug is available without a prescription] or is insulin.'.

[c] Health Flexible Spending Arrangements and Health Reimbursement Arrangements- Section 106 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

'[f] Reimbursements for Medicine Restricted to Prescribed Drugs and Insulin- For purposes of this section and section 105, reimbursement for expenses incurred for a medicine or a drug shall be treated as a reimbursement for medical expenses only if such medicine or drug is a prescribed drug [determined without regard to whether such drug is available without a prescription] or is insulin.'.

[d] Effective Dates-

[1] DISTRIBUTIONS FROM SAVINGS ACCOUNTS- The amendments made by subsections [a] and [b] shall apply to amounts paid with respect to taxable years beginning after December 31, 2010.

[2] REIMBURSEMENTS- The amendment made by subsection [c] shall apply to expenses incurred with respect to taxable years beginning after December 31, 2010.