Amwins Connect - October 2024 Question of the Month

Answer

Yes, medicine and drugs qualify as medical care expenses, even if the item is without a prescription from the provider. The types of medicine and drugs that qualify are those that are purchased for prevention or alleviation of a physical or mental defect or illness. In order for the OTC item purchase to be reimbursable, the item must be for medical care as defined under Code Section 213(d). Expenses that benefit ‘general’ health, would be considered personal expenses and will not qualify as medical care expenses.

A Few Tips for Employers Employers that sponsor HSA or HSA compatible health plans should remind their employees that their HSA funds can be used to pay for OTC medical care expenses on a tax-free basis. Employers with health FSAs and HRAs can design their plans to limit the types of OTC items that are eligible for reimbursement. However, the employer must follow those expenses permitted under Code Section 213(d) and the CARES Act. This information should be communicated during open enrollment and/or in a summary plan description.

Resources

^{While every effort has been taken in compiling this information to ensure that its contents are totally accurate, neither the publisher nor the author can accept liability for any inaccuracies or changed circumstances of any information herein or for the consequences of any reliance placed upon it. This publication is distributed on the understanding that the publisher is not engaged in rendering legal, accounting, or other professional advice or services. Readers should always seek professional advice before entering into any commitments.}