The Diversified Blog

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Using Flexible Spending Account Dollars at the Drugstore

Here is a nice article by Kimberly Lankford of Kiplinger:

 

By Kimberly Lankford, Contributing Editor   

 

August 22, 2017

 

The rules changed a few years ago to limit use of tax-free FSA money for nonprescription drugs, but there are plenty of items you can still buy without a prescription. 

 

Q. I know that the law changed a few years ago so you can no longer use tax-free money from a flexible spending account for over-the-counter medications without a prescription. But I saw your article about using FSA money for sunscreen. Wouldn't you need a prescription for that?

 

A. You can use FSA money for sunscreen with an SPF of 15 or higher, and you don't need a prescription.

 

In the past, you could use tax-free FSA money for prescription and nonprescription drugs. You can still use FSA money for prescription drugs, but the law changed in 2011 to prohibit the use of FSA money for over-the-counter drugs with an active medical ingredient without a prescription. There are a few exceptions. For example, you can use FSA money without a prescription for insulin, prenatal vitamins, and glucosamine and chondroitin supplements for arthritis treatment, says Jeremy Miller, CEO of FSAStore.com, which specializes in selling items that are FSA-eligible.

 

But there are also many drugstore items that are FSA-eligible without a prescription because they do not contain any medicated ingredients, says Miller. For instance, in addition to sunscreen with an SPF of 15 or higher, you can use FSA money for blood pressure monitors, orthotic shoe inserts, knee and back braces, breast pumps, nasal aspirators, bandages, first-aid kits, thermometers, heat and cold packs, and contact lens solution. For lists of FSA-eligible items that do and do not require a prescription, see FSAStore's lists of FSA-Eligible Products & Services.

 

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail This email address is being protected from spambots. You need JavaScript enabled to view it. .

 

The views, opinion, information and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc. The selection of any posts or articles should not be regarded as an explicit or implicit endorsement or recommendation of any such posts or articles, or services provided or referenced and statements made by the authors of such posts or articles. Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting or tax advice.

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