For employers with flexible spending accounts (FSAs) or health reimbursement accounts (HRAs), the IRS has revised its regulations to allow the continued use of debit cards for prescribed, over-the-counter medications after January 15, 2011.
- The employee must present the prescription to the pharmacist prior to the purchase of the over-the-counter medication. The prescription must be numbered.
- The pharmacy must retain a record of the transaction, including the prescription number, name of purchaser (or name of the person the prescription is for), the date, and amount of the purchase.
- The FSA vendor may request to inspect the transaction documents.
- The debit card system will not accept charges for an over-the-counter drug or medicine unless a prescription number has been assigned.
- The debit card system must meet existing IRS requirements that are intended to limit use of debit cards to only tax-qualified medical care expenses.
- The employee must attest that he or she will limit the card’s use to tax-qualifying expenses.