Partner Of SAN

1881 Worcester Road | Suite 101 | Framingham, MA 01701 | 508.370.0002

2011 OTC Change Will Apply to all FSA Plans
Submitted October 9, 2010


Starting Jan. 1, 2011, you will no longer be able to use your health care flexible spending account (FSA) to pay for over-the-counter (OTC) medications at a pharmacy, supermarket or other retail store without a prescription. This change is part of the Affordable Care Act passed in 2010.

Insulin, prescription medicines and some OTC supplies – such as bandages, crutches, blood sugar test kits and contact solution – will continue to be eligible, if your health care FSA plan allows.


If I get a prescription for an OTC medicine, how do I use my FSA to pay for it?
If you buy the medicine off the shelf you will need to submit an FSA claim form, copy of your receipt and your provider’s prescription. The prescription must include:
• Your name
• Name of medicine
• Dosage and form, Quantity prescribed, Instructions
• Signature of the provider who wrote the prescription

If you ask a pharmacist to fill the prescription you will need to submit an FSA claim form with your receipt. Ask for a receipt that includes:
• Prescription number
• Your name
• Date of purchase
• Dollar amount

For the latest reform information, visit, the federal government website designed to help you understand the new law and how it will affect you.

How does this affect debit cards?
You cannot use debit cards to pay for OTC medicines at pharmacies,supermarkets or other retail stores. OTC supplies may still purchased with your debit card if your health FSA plan provides coverage for those items. If you want to be reimbursed from your FSA for OTC medicines, you must follow the instructions described on the front of this flyer.

How does this affect grace periods?
OTC medicines bought prior to Jan. 1, 2011 but submitted for reimbursement after Jan. 1, 2011 do not require a prescription to be considered for reimbursement under the plan. The new restriction on OTC medicines begins on Jan. 1, 2011 and will apply regardless of any grace periods that extend to, on or after Jan. 1, 2011.

For example:
Your plan has a grace period through March 15, 2011, so you can be reimbursed from your FSA for anything you bought up to that date. The grace period, however, doesn’t apply to any OTC medicines you buy on or after Jan. 1, 2011, unless you have a prescription – even though the claim is for reimbursement from your remaining 2010 health care FSA account balance.

There will still be limits on the amount of OTC items you can be reimbursed for from your FSA. You will only be reimbursed for a reasonable quantity of an eligible OTC expense as determined by the plan administrator.
Please remember to consider these new OTC rules when estimating the
dollar amount to put in your FSA for the next plan year.

Please remember to consider these new OTC rules when estimating the dollar amount to put in your FSA for the next plan year.

For More Information
• Visit, the federal government’s health care reform website.
• Visit The Internal Revenue Service (IRS) publishes information about FSAs and eligible expenses.
• Your employer may limit what items are eligible for FSA purchase or reimbursement. Check your official benefit plan information for details about your FSA.

Examples of OTC items that will require a prescription for FSA purchase or reimbursement as of Jan. 1, 2011:
• Acid Controllers
• Acne Medicine
• Aids for Indigestion
• Allergy and sinus medicine
• Anti-diarrheal medicine
• Baby rash ointment
• Cold and flu medicine
• Eye drops
• Feminine anti-fungal or anti-itch products
• Hemorrhoid treatment
• Laxatives or stool softeners
• Lice treatments
• Motion sickness medicines
• Nasal sprays or drops
• Ointments for cuts, burns or rashes
• Pain relievers, such as aspirin or ibuprofen
• Sleep aids
• Stomach remedies

Examples of OTC items that may continue to be purchased or reimbursed from an FSA without a prescription:*
• Bandages
• Birth Control
• Braces and supports
• Catheters
• Contact lens solution and supplies
• Crutches
• Denture cleaners and adhesives
• Diagnostic tests and monitors (such as blood glucose monitors)
• Elastic bandages and wraps
• First-aid supplies
• Insulin
• Ostomy products
• Reading glasses
• Walkers, wheelchairs and canes

*Most major grocery, department, retail and drug stores will be able to identify at the cash register what supplies may still be purchased with an FSA debit card.

As always, feel free to contact us if you have any questions or immediate needs.

Michael Orr
Integrated Benefits Alliance Director of Development