IRS Releases New FSA/HRA Guidance for 2011

December 23, 2010 ( – The Internal Revenue Service (IRS) has put out new guidance allowing continued use of health flexible spending arrangement (FSA) and health reimbursement arrangement (HRA) debit cards to buy prescribed over-the-counter medicines and drugs.

Tax agency officials said that effective after January 15, 2011, the use of debit cards has to comply with procedures tracking ones used by drugstores when selling prescribed medicines or drugs. The procedures include requirements that a prescription for the medication be presented to the pharmacy or the mail-order or Web-based vendor that dispenses the medication and that proper records be kept.

The IRS said that in following the health reform law, the cost of over-the-counter medicines or drugs can be paid back from a health FSA or HRA if the taxpayer has gotten a prescription. The requirement to get a prescription does not apply to insulin or to other health care expenses such as medical devices, eye glasses or contact lenses. The prescription requirement applies to purchases made on or after January 1, 2011, but not to purchases made in 2010 even if reimbursed after December 31, 2010.

The new guidance, is at Other IRS information is at,,id=220809,00.html?portlet=6.