The CARES Act of March 2020 expanded the benefits of HSAs and FSAs by removing the prescription requirement for several OTC drugs and medicines, and by adding feminine hygiene products to the list of expenses eligible for reimbursement. This means you can now use your HSA or FSA to reimburse yourself for several everyday items, or if you have a debit card associated with your account, you can use the card to pay for them directly.
Prior to the passage of the act, these items were only eligible for reimbursement with a prescription. Now that the prescription is no longer required, you can make these purchases using the pre-tax funds you've set aside.
Which OTC items are now eligible expenses?
If you have a health reimbursement arrangement (HRA) or a part of a voluntary employee beneficiary association (VEBA), check with your health plan as the eligible items may differ.
You can find a more complete list of eligible expenses here, but some of the most common items that removed the prescription requirement include:
- Cold, cough, and flu medicine
- Tampons, pads, and liners
- Pain relievers and anti-inflammatory medications
- Allergy and sinus medicine
- Digestive aids and laxatives
- Baby rash ointments and creams
- Baby electrolytes
- Sleep aids
- Skin treatments for conditions such as eczema and psoriasis
- Acid controllers
- Acne medications
The expanded eligible expenses list is a permanent change and these newly added items are retroactively eligible beginning on January 1, 2020, meaning you can file for reimbursement for these items if you've purchased them since the beginning of 2020.
If you try to purchase these new items with a Blue Cross and Blue Shield of Vermont debit card, and your card is declined, it is likely because the retailer has not yet finished updating their systems to mark these items as eligible. You can keep your receipt and file for reimbursement.