The IRS has released guidance pertaining to the use of health debit cards for the purchase of OTC medicines after Jan. 1, 2011. As you know, as of Jan. 1, 2011, all OTC medications will require a prescription in order to be eligible for reimbursement from FSA, HRA, HSA or Archer MSA accounts. This has not changed. However, in the prior guidance, it was stated that health debit cards could not be used to purchase OTC items, with or without a prescription.

IRS notice 2011-5 allows for the use of debit cards for the purchase of qualified OTC items accompanied by a prescription, up to and beyond Jan. 15, provided certain circumstances are met.

To read IRS notice 2011-5, click here.