The Treasury Department and the Internal Revenue Service (IRS) recently ruled
that certain non-prescription drug expenses may be reimbursed from pre-tax
heath care dollars contributed by an employee to a Health Care Flexible Spending
Account (FSA).
Faculty and staff members currently enrolled in a FSA may take advantage of
the expansion of the eligible expenses immediately and eligible employees not
currently participating should consider this new information when deciding
on FSA participation during this year’s Open Enrollment period. Remember
you must enroll each year in a FSA.
The new IRS ruling (Rev. Rul. 2003 -- 102) allows reimbursement for over-the-counter
(OTC) medications, tax-free (federal) when the OTC product is used for medical
purposes. This new ruling addresses the increased number of drugs available
on an over-the-counter basis and provides consumers savings on some drugs that
were formerly covered under a prescription drug plan. Please
click here to see a list of covered items. This list may not be all
inclusive. If you have questions about an over-the-counter drug not listed,
please contact me.
The claim requirement will normally be a cash register receipt with
the date of purchase, product name, and price. As specified
on the list of covered items, some OTC drugs require a recommendation from
your physician.
Keep in mind that you may not "stock pile" items. For
example you may not buy 10 bottles of Advil at the end of December to use
up the remaining balance in your FSA and expect to be reimbursed from your
flex account.
More information on FSAs and reimbursement for eligible out-of-pocket expenses
can be found on the Human Resources Department web site at: http://www.nmu.edu/humanres/EqualOp/flex_06.pdf
Kristen Portale