HSA - FSA Eligible Expenses
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OTC Meds and Feminine Products Now FSA-Eligible
Did you know that certain over-the-counter medicines and feminine hygiene products are now FSA-eligible expenses without a prescription?
Cariann Lieske, SHRM-CP
Apr 15, 2020
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*Updated March 29, 2021
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed on March 27, 2020, reversed a provision of the Affordable Care Act (ACA) that formerly required a prescription to purchase over-the-counter (OTC) medicines with pre-tax dollars. But the CARES Act went one step further to include menstrual products as an eligible tax-free expense.
When did my OTC medications become eligible FSA/HSA/HRA expenses?
Although the CARES Act became law on March 27, 2020, this provision is retroactive to January 1, 2020. Every over-the-counter medication and feminine product that you purchased after December 31, 2019 is eligible for reimbursement through your qualifying HSA, FSA or HRA plan. If you still have receipts from those purchases, you can submit them to be reimbursed!
Which OTC medicines are eligible FSA/HSA/HRA expenses?
Sec. 4402 of the CARES Act simply says “Inclusion of certain over-the-counter medical products as qualified medical expenses” but does not expand to identify what “certain” means. It may be assumed that most products with medicated ingredients are deemed eligible.
Which menstrual products are eligible FSA/HSA/HRA expenses?
Menstrual care products outlined in Sec. 4402 include tampons, pads, liners, cups, sponges or similar products used by individuals with respect to menstruation.
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*Are COVID-19 related expenses eligible for reimbursement under my tax free account (FSA, HSA, or HRA)?
Yes, the IRS announced in March 2021 that anything purchased as personal protective equipment (face masks, hand sanitizer, sanitizing wipes) for the primary purpose of preventing the spread of COVID-19 is considered a tax deductible medical expense. This means employees can claim comparable personal expenses with their FSA, HRA, or HSA dollars.
Can I use my flex debit card to pay for OTC meds?
This is a new provision that just became law on March 27, 2020 as part of the CARES Act, so most retailers and pharmacies may not have this functionality available right away. If that’s the case, hold onto your receipts and submit them for reimbursement until you can simply swipe your card. And when you are able to swipe your card, remember to still hold onto receipts as substantiation.
Can I purchase tax-free OTC meds and feminine products for my dependents?
OTC medications and feminine products paid for with tax-free FSA or HSA contributions can be expenses for you, your spouse, your child, or a “qualifying relative.”
If you have more questions, please contact our HR experts at HR@stratus.hr. To see the full list of eligible tax-exempt medical expenses beyond what the CARES Act includes, please visit irs.gov.
If you’ve been stocking up on fever meds and cough drops, you’ll be happy to know that a small section of the CARES Act allows you to pay for all this and more with your HSA, FSA or HRA dollars!