Flexible Spending Accounts to Reimburse for Non-Prescription Medication

Many employees have set up flexible spending accounts for their employees. This allows the employee to pay for medical expenses with pre-tax dollars. The plan defines the type of medical expenses that can be covered by the plan. The employee designates before the beginning of the year the amount they would like deducted from their paycheck and set aside in this account. The employee then submits requests for reimbursement of the expenses with verification of the expense. Typically, the types of expenses that are covered by these plans are expenses that are not covered by insurance. A recent change in the IRS position as to what is considered medical expenses for these plans will be beneficial for most of you. Because many drugs are now being sold over the counter, the IRS will allow these flexible-spending accounts to reimburse for non-prescription medication. The medication must be purchased for medical care and not merely beneficial to the person's health. For example, an employee buys an antacid, an allergy medicine, a pain reliever, cold medicine and vitamins. None of them are purchased with a physician's prescription. The employee can submit a claim for the antacid, allergy, pain reliever and cold medicine and get reimbursed for them. The cost of vitamins, which is merely beneficial to the employee's general health, is not a medical care expense and is not reimbursable. Flexible spending plans should be reviewed and amended to include non-prescription medicines.

To contact Feeley & Driscoll, please click here or call us at 1 (888) 875-9770.