03/03/2017

Over-the-Counter Expenses and Pre-Tax Spending Accounts

Many people rely on various over-the-counter (OTC) medications to help with symptoms when suffering from allergies, the flu, or general aches and pains. While these types of expenses are generally not eligible to be reimbursed from a pre-tax plan such as a Flexible Spending Account or Health Savings Account, there are certain exceptions to this rule.

1. The OTC medication is filled at the pharmacy as a prescription.

If a doctor prescribes the OTC medication and the prescription is filled through the pharmacy and assigned a prescription number, the expense is eligible for reimbursement. As long as  the spending account allows for the reimbursement of prescriptions, no further documentation is required for the OTC medication to be considered eligible.

2. The doctor provides the patient with a note or letter of medical necessity.

The doctor may recommend the patient take certain OTC medications for a specific medical condition.  If this is the case and the OTC medication is not purchased as a prescription through the pharmacy, the participant can provide the letter from the doctor when submitting a claim for reimbursement for the OTC medication.

While there are restrictions on medication purchased over-the-counter, there are still many other eligible expenses which can be purchased at drug stores and pharmacies and can be reimbursed pre-tax. Some examples include diabetic supplies, bandages, first aid kits, sunscreen and contact lens solution.   Specific information regarding eligible expenses for a plan can be found in the Summary Plan Description.

BusinessPlans, Inc. – myCafeteriaPlan does not intend to provide legal or tax advice and information contained in this article should not be interpreted as such. Regulations governing pretax plans are often open to interpretation and should be reviewed with your legal or tax advisor before making any decisions regarding your plan.

Posted 3/3/17