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On January 1, 2011, a new law took effect that requires a prescription in order to purchase or be reimbursed for Over-the-Counter (OTC) drugs from a medical spending or savings plan.
If you or a family member suffers from one of the hundreds of medical conditions commonly treated with an OTC drug, such as allergies or acid reflux disease, you can still use your WageWorks account to save on the cost of treatment. Also, not all OTC items require a prescription. Medical devices (such as monitors) and supplies (such as bandages and contact lens solution) are not affected by the new law and can still be purchased or reimbursed from your account without a prescription.
To use your account, simply go to your health care provider and have him or her write you a prescription for the OTC drug or drug type (Claritin or allergy medication). If you use a WageWorks Health Care Card, you can then take the prescription to the pharmacy counter and use your Card to fill it and make the purchase. If the pharmacy has an IIAS system in place, the transaction will be automatically verified and no further action will be required. If it does not have an approved system, you will have to send the prescription and a detailed register receipt to WageWorks to complete the verification process. You will not be able to use your Card at the general merchandise checkout, as OTC drugs have been removed from the list of items eligible for purchase generally. If you do not use a Card, you can file a Pay Me Back claim along with the detailed register receipt and prescription for reimbursement.
A few things to remember when getting a prescription from your health care provider
- A prescription for an OTC drug or medicine should be exactly the same as one for a prescribed drug or medicine. As long as it complies with state laws and is written on a prescription pad, it should be sufficient.
- All prescriptions are good for one year and multiple refills, unless indicated otherwise.
- A single prescription can contain multiple categories or product types, but a multiple prescription will only be accepted for Pay Me Back claims. For best results, you should obtain a separate prescription for each item.
- The prescription does not have to be specific to a product or name brand. A general OTC category, such as ibuprofen, is sufficient. However, if the prescription is a specific brand or indicates "dispense as written," only the indicated brand name and dosage and count will be accepted.
When filing a claim for a prescribed OTC item, you need to submit either an itemized cash register receipt that includes the date, amount, provider name, OTC item and prescription number or the itemized receipt and a copy of the prescription.
Special reminder for Health Savings Account participants
Starting in 2011, the IRS will assess a 20 percent penalty on ineligible items (including non-prescribed OTC drugs) purchased with a Health Savings Account (HSA). WageWorks does not verify HSA purchases, and in some instances will not prevent you from purchasing OTC drugs without a prescription. For these reasons, it is especially important for you to monitor your transactions and make sure you get a prescription for all OTC drug purchases. Please remember to retain all documentation (including prescriptions) for your tax records.
- IRS Rx OTC Drug FAQ -- Affordable Care Act: Questions and Answers on Over-the-Counter Medicines and Drugs
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