After a Health Plan has decided to offer a OTC Benefit Program to their members (read more about this here), the health plan must decide what type of plan that they would like to offer to their members. Often times the choice becomes between a card based program and a Mail Order OTC Catalog Program.
Card programs allow members to buy OTC products from a store with a prepaid card that is loaded with a benefit amount. The card program is accepted at certain OTC retailers and the health plan is charged an administrative fee based upon the number of cards that they must load each month. Card Programs do not allow the health plan to control the branding around the OTC program, since the member is shopping at retailers.
Over The Counter Catalog Program
Catalog programs (like the ones administered by OTC Benefit Solutions) allow the health plan to create a custom branded catalog with an approved OTC formulary that members can use to order from the convenience of their home via mail, call or a custom branded website. The members can use their allowance anytime during the benefit period. The items then are shipped directly to the member. This allows the Health Plan to have better control of the formulary that their members have access to. There is no monthly administrative fee, but the health plan does cover the shipping to the members. This is either a flat rate per package or actual freight depending on the benefit and the location of members.