Prescription Required for Over the Counter Medications
On September 3, 2010, the IRS issued
Notice 2010-59 which explains changes to FSAs, HSAs and HRAs when submiting claims for over-the-counter medicines and drugs.
Beginning January 1, 2011, over-the-counter medicines and drugs will only be reimbursed if the participant obtains a prescription. This rule will take effect January 1, regardless of whether or not your FSA plan year is calendar or begins during the middle of the calendar year.
Note: Insulin is exempt from the new rules and remains reimbursable without a prescription.
The reimbursement of items for medical care that are NOT medicines such as crutches, eye glasses, bandages and blood sugar test kits will not require a prescription from a doctor.
Because there is some possible overlap in plan years, the new rules make it clear that medications purchased prior to 1/1/2011 are not impacted, even if the reimbursement is not made until after 1/1/2011. But be aware that purchases made on or after 1/1/2011 are restricted even if they are intended to be used for reimbursements under a health FSA for the 2010 year account balance under the plan grace period. So that means that account balances for the 2010 plan year that carry over into 2011 because of the grace period cannot be used to reimburse for over-the-counter medications if they were purchased AFTER 1/1/2011 without a prescription.
