OTC Drug Notice

The Treasury Department and the Internal Revenue Service (IRS) ruled that certain non-prescription drug expenses may be reimbursed from pre-tax heath care dollars contributed by an employee to a Health Care Flexible Spending Account (FSA).

Faculty and staff members currently enrolled in an FSA may take advantage of the expansion of the eligible expenses immediately and eligible employees not currently participating should consider this new information when deciding on FSA participation during this year’s Open Enrollment period. Remember, if you choose to participate in an FSA, you must enroll each year.

The IRS ruling (Rev. Rul. 2003 - 102) allows reimbursement for over-the-counter (OTC) medications, tax-free (federal) when the OTC product is used for medical purposes.  This new ruling addresses the increased number of drugs available on an over-the-counter basis and provides consumers savings on some drugs that were formerly covered under a prescription drug plan.  Please click here to see a list of covered items.  This list may not be all inclusive.  If you have questions about an over-the-counter drug not listed, please contact Kristen Bjorne, assistant director of human resources, at kportale@nmu.edu or 906-227-1030.
 
The claim requirement will normally be a cash register receipt with the date of purchase, product name and price.  As specified on the list of covered items, some OTC drugs require a recommendation from your physician.  

Keep in mind that you may not "stock pile" items.  For example, you may not buy 10 bottles of Advil at the end of December to use up the remaining balance in your FSA and expect to be reimbursed from your flex account.

More information on FSAs and reimbursement for eligible out-of-pocket expenses can be found at:  http://webb.nmu.edu/Webb/PDFs/HR/flex_04.pdf.