With the recent release of IRS Notice 2020-18 and the passage of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, we wanted to make sure you’re aware of the changes within the Act that may impact your benefit accounts — specifically around over-the-counter medications.
The much-anticipated CARES Act was signed into law on March 27, 2020, and states that consumers can purchase over-the-counter (OTC) drugs and medications with funds from their health savings account (HSA) or flexible spending account (FSA). Consumers may also receive reimbursement for OTC purchases through those accounts. In addition, menstrual products are now considered a qualified medical expense, meaning consumers may pay or be reimbursed for these products through their HSA or FSA. This provision is effective for purchases made after December 31, 2019, and for reimbursements of expenses incurred after December 31, 2019.
A few examples of OTC drugs and medications that are now considered eligible under your HSA or FSA without a prescription include:
- Pain relief medication
- Cold and flu products
- Allergy medicine
- Menstrual products
Please note: If you try to purchase OTC or menstrual care items with your benefits card before the merchant has updated their system, the transaction may be denied. If this happens, you can submit a claim for reimbursement; just be sure to save your receipt. Merchants have been working to update their systems with the new eligible product list, but it may take some time.