IRS Offers New Guidance on FSA and HRA Debit Cards

Written by: PeopleKeep Team
Originally published on December 28, 2010. Last updated July 9, 2015.

New Rules for HRA Debit Cards

The Internal Revenue Service has issued new guidance allowing the continued use of healthHRA Debit Cards flexible spending arrangement (FSA) and health reimbursement arrangement (HRA) debit cards for the purchase of prescribed over-the-counter medicines and drugs.

The new guidance modifies previous guidance to permit taxpayers to continue using FSA and HRA debit cards to purchase over-the-counter medications for which the taxpayer has a prescription. Effective after Jan. 15, 2011, in accordance with the new guidance, this use of debit cards must comply with procedures reflecting those that pharmacies currently follow when selling prescribed medicines or drugs.


Additional Procedures for HRA Debit Cards

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 retained.

In accordance with the Affordable Care Act, the cost of over-the-counter medicines or drugs can be reimbursed from a health FSA or HRA if a prescription has been obtained. The requirement to obtain a prescription does not apply to insulin.

Click here to read the full notice.

Click here to read the FAQ. 


Originally published on December 28, 2010. Last updated July 9, 2015.


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