Q: One of the guys at work heard that when Reform passes, we won’t be able to buy OTC drugs, band-aids, etc. with our HSA acct. do you know if this is true?
A: Sounds like you're talking about OTC drugs no longer being eligible for reimbursement beginning w/ 2011 tax year. There’s specific paragraphs for HSAs, Archer MSAs, FSAs and HRAs. But they all say you can expense the “amount paid for medicine or a drug only if such medicine or drug is a prescribed drug (determined without regard to whether such drug is available without a prescription) or is insulin.” So it’s clear Tylenol is out, but band-aids may very well still be eligible. All this is pending release of final IRS regs.
A: Sounds like you're talking about OTC drugs no longer being eligible for reimbursement beginning w/ 2011 tax year. There’s specific paragraphs for HSAs, Archer MSAs, FSAs and HRAs. But they all say you can expense the “amount paid for medicine or a drug only if such medicine or drug is a prescribed drug (determined without regard to whether such drug is available without a prescription) or is insulin.” So it’s clear Tylenol is out, but band-aids may very well still be eligible. All this is pending release of final IRS regs.
Hope this helps and as always we will offer further clarity as we get it!
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