En español | Q. Is it true that next year I won't be able to use my flexible spending account to pay for over-the-counter drugs unless I get a doctor's prescription?
A. That's right. Even though you don't need a prescription for over-the-counter medications like Claritin or ibuprofen, if you want to pay for them with money from a flexible spending account (FSA), next year you will need to get a prescription from your doctor. The new prescription requirement ensures that only the cost of the drugs that your doctor says you need will be deducted from your taxable income.
Some 20 million Americans contribute a small portion of their income into these tax-free accounts, which lower their taxable income. For example, a person in the 15 percent income tax bracket who makes the average contribution of $1,208 into an FSA saves roughly $274 in taxes while someone in the 35 percent tax bracket saves about $438.
The money in an FSA can be used to pay for most health-related items that your insurance doesn't cover or doesn't cover completely, such as crutches, bandages, blood sugar test kits, eye glasses, contact lenses, as well as over-the-counter drugs. FSA money can also be used to pay your health insurance copays or deductibles.
According to the tax code, if you don't use all your FSA money by the end of the year, you lose it. FSAs are offered by 18 percent of employers that provide health care coverage, including three out four companies with 200 or more workers.