Daniel Stewart

Which OTC Prescription Medications are Covered by FSA?

Flex spending accounts (FSAs) are medical savings accounts that can be used to pay for medical expenses not covered by insurance. Similar to a health savings account (HSA), funds are set aside specifically for use to cover medical costs.

Funds in an HSA compared to FSA funds are different in the fact that FSA does not roll over at the end of the year. Unspent funds are lost by the account holder and may return to an employer account if the FSA is set up through an employer.

While most people use FSA funds to pay for things like doctor visits and prescription medications, options now exist to use FSA funds for some over-the-counter (OTC) medications. The CARES Act of 2020 allows for certain OTC drugs to be purchased using FSA funds, opening up new possibilities for those seeking to save on out-of-pocket medical expenses.

What's Covered by an FSA?

Under the CARES Act, FSA funds can now be used for OTC cold and cough medications, rash ointments and creams, electrolyte mixtures for babies, and sleep aids. Additionally, pain relievers and digestive aids are covered.

As a bonus, some non-medicinal pharmacy products are also now covered by FSA funds. Tampons and pads are covered by the CARES Act to allow FSA funds to be used for these products. Also, some non-medicated skin treatments are covered.

Are All Retailers Participating?

All retailers that accept FSA funds should be participating in these policies, but you may run into one that has not updated its system yet. Despite these changes going into effect in 2020, if a retailer has not updated its point-of-sale system to reflect the changes, you may need to contact management.

If you want to know more about choosing the right savings solution for your medical needs, you're encouraged to talk to your employer about the benefits of an HSA compared to FSA benefits. You may have choices you were unaware of, and even small changes to your healthcare savings can make a big difference.

Author Resource:-

Daniel Stewart has been helping people with their money management and personal finance with over 15 years' experience in business finance. You can find his thoughts at health investment blog.