As mandated by PPACA, as of Jan. 1, 2011, over-the-counter medicine expenses will only be reimbursable if they have a prescription. Other OTC items (such as contact lens solution and bandages) will still be covered. This change aligns what is currently allowable as an IRS qualified medical expense deduction if you itemize your medical expenses with what will be allowed under an FSA/HSA/HRA plan.
These changes have several implications for users of the mySourceCard and HSAToday Card. Because OTC medicines are no longer eligible for reimbursement without a prescription, they will not be listed in the IIAS eligible item list and therefore cannot be purchased with the card at IIAS merchants. In the case of a prescription OTC purchase, participants will need to submit those with a claim form and be reimbursed. For a summary of the changes, click here (see page 59, section 9003.)
To read IRS Publication 502 which defines a qualified medical expense, click here.
