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Getting Drugs Over the Counter? You've Gotta Pay the Tax Man.

Beth Dean 11.01.10
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Effective January 1, 2011, over the counter (OTC) medications will no longer be reimbursed through the Flexible Spending Account (FSA) unless they are accompanied by a doctor’s prescription.

Medical supplies and medications that legally require a prescription to be dispensed will not be affected, and may still be paid for using the FSA debit card if your plan utilizes one. Below is further clarification on the changes. For more information, please see the guidance provided on the IRS website (,,id=227308,00.html).

Will a letter from my doctor suffice instead of a prescription for OTC drugs?
No. You’ll need a doctors prescription to be reimbursed for those items. According to IRS regulations, a Letter of Medical Necessity will no longer meet the requirement.

Can I still use my FSA debit card for OTC medications?
No. Because OTC medicines and drugs will require a prescription for FSA reimbursement after January 1, 2011, the FSA debit card can no longer be used at the point of purchase, even if you have a prescription for the OTC drug. You can, however, submit a reimbursement claim form with your receipt and prescription information.

Can I still use my FSA debit Card to buy OTC items like contact lens solution?
Yes, the FSA debit card can still be used to purchase many OTC medical supply items that are not considered medicines or drugs, such as wheelchairs, diabetic supplies, first aid kits, and hearing aid batteries. Check with your FSA plan administrator for confirmation and details.

My employer has a 2 month claims extension that ends March 15th, 2011. Can I get reimbursed without a prescription until then?
Unfortunately, no. The new law takes effect January 1, 2011 regardless of plan-year end date or claims extension.

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