OTC Now OK Without RX

OTC expenses have required a prescription to be eligible under FSAs, HSAs and HRAs since 2011 per the Patient Protection and Affordable Care.  The CARES Act passed last week in response to the COVID-19 crisis permanently removed this requirement, so prescriptions are no longer required.  It also expanded the definition of eligible expenses to include menstrual care products.

The following IRS Code Sections were amended to REMOVE the requirement for a prescription for over the counter expenses to be considered eligible medicines or drugs.  They were each also amended to ADD menstrual care products as eligible medical expenses.

HSAs:  Section 223(d)(2)

Archer MSAs: Section 220(d)(2)(A)

FSAs and HRAs: Section 106(f)

  • -Over the counter expenses are eligible medical expenses for reimbursement in FSAs, HSAs and HRAs*.
  • -Prescriptions are no longer required.
  • -Menstrual care products are eligible medical expenses.
  • -This change applies to any expenses incurred 1/1/2020 and forward, regardless of plan year.
  • -These changes take effect immediately, so you can file claims for reimbursement right away.
*depending on HRA plan design!

Debit Card Notes:

  • Debit cards will not work right away on OTC items.
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  • Debit card systems are working as quickly as possible to update the eligible expense coding for OTC items.  Merchants will also be working to update their inventory coding.  This may take a couple months to roll out, so your experience may vary.
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  • If you pay for an OTC item out of pocket, you can submit a claim for reimbursement right away via our mobile app or online portal.

The CARES Act

Per the CARES Act, the following IRS Code Sections were amended to REMOVE the requirement for a prescription for over the counter expenses to be considered eligible medicines or drugs.  They were each also amended to ADD menstrual care products as eligible medical expenses.

HSAs:  Section 223(d)(2)

Archer MSAs: Section 220(d)(2)(A)

FSAs and HRAs: Section 106(f)

Menstrual Care Product is defined as “a tampon, pad, liner, cup, sponge, or similar product used by individuals with respect to menstruation or other genital tract secretions”

HSAs: Section 223(d)(2)

“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.” is replaced with “For purposes of this subparagraph, amounts paid for menstrual care products shall be treated as paid for medical care.”

Archer MSAs: Section 220(d)(2)(A)

“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.” is replaced with “‘For purposes of this subparagraph, amounts paid for menstrual care products (as defined in section 223(d)(2)(D)) shall be treated as paid for medical care.’’

FSAs and HRAs: Section 106(f)

“(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.” is replaced with “(f) Requirements for menstrual care products.

For purposes of this section and section 105, expenses incurred for menstrual care products (as defined in section 223(d)(2)(D) ) shall be treated as incurred for medical care.”