In case you missed it when I wrote about Changes Coming To Flex Spending Plans – one of the changes you’ll have to deal with beginning with 2011 is that you can no longer use your Flex-Spending Account (FSA) to reimburse yourself for over-the-counter drugs like you’ve been able to do in the past.
However, there is a way to get the over-the-counter (OTC) drugs that your physician recommends and use your FSA funds to pay for it… if your physician gives you a prescription for it. Even though the IRS has disallowed the use of FSA funds for OTC drugs, if your physician gives you a prescription for the OTC drug, your FSA can be used to pay for the drug.
There are some rules though: first, the prescription has to provided to the pharmacist prior to the purchase, and the pharmacist must dispense the drug just as if it were a regular prescription, with a Rx number assigned to the prescription. The records must be maintained by the pharmacy and the taxpayer and available to the IRS if necessary. FSA debit cards (and HSA debit cards) can also be used for this purpose, as long as all of the requirements are met.