Starting January 1, 2011, non-prescription over-the-counter (OTC) medicines and biologicals (allergy & sinus, anti-itch, cough, cold & flu, baby rash creams, pain relievers, homeopathic remedies, and many more) will no longer qualify for reimbursement from the FSA or HRA. This includes medicines you purchase that don’t require the written advice of your physician and don’t require “filling” by the pharmacist.
OTC Medical Supply Purchases
This new restriction does not affect medical supply purchases. Expenses for contact lens solution, ace bandages, hearing aid batteries, diabetic test strips and supplies, and many other items will continue to qualify for reimbursement.
Doctor-prescribed OTC Purchases
If your doctor annually prescribes specific OTC medicines to treat a diagnosed, existing condition these may still qualify, by submitting a letter of medical necessity or prescription from your physician with your claim form and supporting documentation.
Remaining Funds & New Elections
During your benefit plan open enrollment, please be conservative, making sure to exclude costs you anticipate after 12/31/2010 for non-qualified OTC medicines.
If you are currently enrolled in an FSA for coverage that ends after January 1, 2011 (maybe a July 1 or October 1 Plan Year), your OTC purchases after 12/31/2010 will no longer qualify for reimbursement under that plan. If this affects you, please plan now to use available funds during your coverage period for other qualifying expenses.
For Plans with the Benny Card
These OTC items will be deleted from the list of qualified items that can be purchased using a Healthcare FSA debit card. The participant may still be able to use their Health FSA or HRA funds by filing a claim if they obtain a letter of medical necessity from their physician, specifically prescribing this item. (Note: These OTC medicines currently account for 35% of the items on the OTC qualified list.)