Using Flexible Spending Account Dollars at the Drugstore

The rules changed a few years ago to limit use of tax-free FSA money for nonprescription drugs, but there are plenty of items you can still buy without a prescription.

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Question: I know that the law changed a few years ago so you can no longer use tax-free money from a flexible spending account for over-the-counter medications without a prescription. But I saw your article about using FSA money for sunscreen. Wouldn't you need a prescription for that?

Answer: You can use FSA money for sunscreen with an SPF of 15 or higher, and you don't need a prescription.

In the past, you could use tax-free FSA money for prescription and nonprescription drugs. You can still use FSA money for prescription drugs, but the law changed in 2011 to prohibit the use of FSA money for over-the-counter drugs with an active medical ingredient without a prescription. There are a few exceptions. For example, you can use FSA money without a prescription for insulin, prenatal vitamins, and glucosamine and chondroitin supplements for arthritis treatment, says Jeremy Miller, CEO of FSAStore.com (opens in new tab), which specializes in selling items that are FSA-eligible.

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But there are also many drugstore items that are FSA-eligible without a prescription because they do not contain any medicated ingredients, says Miller. For instance, in addition to sunscreen with an SPF of 15 or higher, you can use FSA money for blood pressure monitors, orthotic shoe inserts, knee and back braces, breast pumps, nasal aspirators, bandages, first-aid kits, thermometers, heat and cold packs, and contact lens solution. For lists of FSA-eligible items that do and do not require a prescription, see FSAStore's lists of FSA-Eligible Products & Services (opens in new tab).

Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.