Are over-the-counter (OTC) drugs considered an eligible expense under health flexible spending accounts (FSAs)?

Author: XpertHR Editorial Team

Yes. The Affordable Care (ACA) originally mandated that OTC drugs purchased without a prescription were not eligible for reimbursement under health FSAs. However, the Coronavirus Aid, Relief and Economic Security (CARES) Act, signed into law on March 27, 2020, effectively reverses this ACA provision, and OTC drugs and medicines are eligible for reimbursement from health FSAs.

The CARES Act also expanded the list of qualified medical expenses to include menstrual care products.

These provisions apply for amounts paid or expenses incurred after December 31, 2019.