On September 3, 2003 the IRS issued a Revenue Ruling that significantly changed the type of expenses that qualify for reimbursement from a health care flexible spending account (FSA). Over the Counter (OTC) drugs and medicines purchased to treat an existing or imminent medical condition qualify as a covered medical expense through the FSA for all purchases made starting at the beginning of the 2003 plan year.

Please see the claims procedures for additional filing requirements as well as for consideration in future election planning. In general, items such as allergy medications, smoking cessation medications, aspirin, cold medications, vitamins and nutritional supplements, etc. may qualify for reimbursement if they are purchased to treat an existing or imminent medical condition. None of these items can be claimed if they are purchased for general health purposes or for possible future use. For example, purchase of a large supply of aspirin to have available in case it is needed sometime in the future will not qualify. Refer to the qualifying/non-qualifying OTC expenses list for other examples.

In addition to specific OTC guidelines, all other general requirements for claims apply. The general requirements are listed on the back of the claim form.

Claims Procedures - OTC Drugs & Medicines

In addition to existing documentation and claims requirements, claims for over the counter drugs or medicines must include the following:

• The receipt or documentation from the store must include the name of the drug/medicine printed on the receipt. This information must be provided by the store, not just listed by the participant on the receipt or on the claim form.
• The participant must indicate the existing or imminent condition on the receipt, on the claim form or on a separate enclosed statement each time these items are claimed. Purchases for general good health will not be accepted.
• Claims for vitamins, herbs or nutritional supplements require a written physician diagnosis of the medical condition and "prescription" of all specific items for that condition on file with the claims office. This physician diagnosis must be renewed every 12 months and be filed with the claims office with the first associated claim submitted for each plan year.

Sample Qualifying OTC Medicines & Drugs

(purchased due to an existing or imminent condition)

• allergy medicines
• cold medicines
• aspirin or pain medicines
• creams or ointments
• antibiotics
• vitamins & nutritional supplements (only if to treat a specific medical condition - see the claims procedures)

Sample Non-Qualifying OTC Medicines & Drugs

(purchased for general health purposes)

• vitamins
• herbs
• nutritional supplements
• cosmetic supplies
• large supply of qualifying items, not for existing or imminent condition
• adhesive bandages or other non-medicines
• general hygiene items (toothpaste, deodorant, etc.)