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Over-the-Counter Rules and Facts


In early 2010, the Affordable Care Act was passed as part of the health care reform initiative. Included in the law was a new rule that requires a doctor’s prescription for the reimbursement of Over-the-Counter (OTC) drugs and medicines from a health flexible spending or savings account.


What Accounts Are Affected by the New OTC Rule?

The law applies to Health Flexible Spending Accounts (FSAs), Health Reimbursement Arrangements (HRAs), Health Savings Accounts (HSAs) and Archer Medical Savings Accounts (Archer MSAs). FSA and HRA participants will need to submit either a receipt listing an Rx number or the prescription along with a receipt detailing the purchase in order to be reimbursed. HSA and Archer MSA participants will need to keep the prescription along with the receipt for their tax records in order to avoid IRS penalties.


When Does the Change Take Effect?

The law takes effect on January 1, 2011, which means that any OTC drug or medicine purchase made in 2011 will require a doctor’s prescription before it can be reimbursed from one of the covered health care accounts.


What about Plans with a Grace Period?

If your employer’s plan includes a grace period that extends the reimbursement period into 2011, you will still need to get a doctor’s prescription for any OTC drug or medicine purchased in 2011.


What Does the Change Mean for Accountholders?

To put it simply, the new rule adds an extra step in the process. Prior to 2011, eligible purchases could be debited directly from the account at a merchant that met IRS-rules for the use of debit cards. And, for purchases at other merchants, all that was required for reimbursement was a valid receipt. Now any accountholder seeking reimbursement will have to first go to a doctor for a prescription, which will then need to be submitted along with the receipt. It’s important to remember that you will still be able to use your account for the same OTC drugs and medicines as before. You will just need a doctor’s prescription before you can be reimbursed.


What Exactly Is a Prescription for an OTC Drug or Medicine?

A prescription for an OTC drug or medicine should be exactly the same as one for a drug or medicine that can only be obtained with a doctor’s prescription. When you go to the doctor, simply ask him or her to write you a prescription for the item for which you want to be reimbursed. The prescription will need to comply with state prescription laws, but generally, if the prescription is written on a prescription pad, it should be sufficient.


What Specific OTC Drugs & Medicines Will Require a Prescription and Which Will Not?

As a general rule, any OTC drug or medicine that you take orally or topically will require a prescription. What will not require a prescription are medical devices (such as monitors) and supplies (such as bandages and contact lens solution). Insulin and diabetic supplies are also items that will not require a prescription. For your convenience, we’ve created a summary list of common items that can and cannot be reimbursed without a doctor’s prescription.


FSA Eligible Medical Items That Do NOT Require a Doctor’s Prescription

Bandages and related items (over-the-counter)
Birth control (over-the-counter)
Blood pressure monitors
Cholesterol test kits and supplies
Contact lenses, cleaning solutions, etc.
Crutches, canes, walkers or like equipment (purchase or rental)
Dentures, bridges, etc.
Diabetic monitors, test kits, strips and supplies
Eye related equipment/materials
Eyeglasses (over-the-counter)
Fertility monitors (over-the-counter)
First aid kits (over-the-counter)
Hearing aids and batteries
Incontinence supplies
Insulin, testing materials and supplies
Magnetic therapy (over-the-counter)
Medical equipment (for treatment of medical condition) & repairs
Medical monitoring and testing devices
Medical supplies (for treatment of a medical condition)
Monitors & test kits (over-the-counter)
Occlusal guards to prevent teeth grinding
Orthopedic and surgical supports
Over-the-counter bandages and related items
Ovulation monitor (over-the-counter)
Pregnancy tests (over-the-counter)
Reading glasses (over the counter)
Teeth grinding prevention devices
Urological products
Walking aids (canes, walkers, crutches and related supplies)
Wheelchair and repairs
Wound care (over-the-counter)


FSA Eligible Medical Items That NOW Require a Doctor’s Prescription

Acne treatments
Allergy & sinus medicine and products
Antibiotic ointment
Aspirin or other pain relievers
Asthma medicines or treatments
Canker & cold sore treatments
Chest rubs
Cold & flu medicines
Corn and callus removers
Cough drops & sore throat lozenges
Cough syrup
Diaper rash ointments and creams
Ear drops & wax removal
Gastrointestinal medications
Herbal or homeopathic medicines
Lice treatments
Motion & nausea medicines
Over-the-counter products for dental, oral and teething pain
Pain relievers
Propecia (for treatment of a medical condition)
Retin-A (for non-cosmetic purposes)
Sleep aids
Toothache and teething pain relievers
Wart removal treatments


What insurance plans does fred’s Pharmacy accept?

Your fred’s Pharmacy accepts most insurance plans including: TRICARE®, Express Scripts, Blue Cross/Blue Shield, Cigna, Humana, CVS Caremark, and many more, as well as Medicare Part B and Part D Plans.

90-day prescription supply is available for many plans; just ask your friendly fred’s Pharmacist for details.

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