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Over-the counter (OTC) Medications are Once Again Flex & HSA Eligible

Over-the counter (OTC) Medications are Once Again Flex & HSA Eligible

Over-the-Counter (OTC) medications (such as Tylenol and Flonase) are once again “qualified medical expenses” for Health Flexible Spending Accounts and Health Savings Accounts thanks to the CARES Act stimulus bill passed by Congress and signed by the President on Friday, March 27, 2020. The OTC medication must have been purchased on or after January 1, 2020.

If you have a Health Savings Account, OTC medications purchased on or after January 1, 2020 are now “qualified” expenses. As you know, you can use the funds in your Health Savings Account at any time for any purpose, but when you file your annual tax return (Form 1040) you must report to the IRS the amount that was withdrawn from your Health Savings Account for “qualified” expenses and be able to provide the IRS with documentation for those “qualified” expenses. Any amount withdrawn from your Health Savings Account during the year that exceeds the total of your “qualified” expenses is taxable income. Now, with this change in the law, OTC medications purchased on or after January 1, 2020 are considered to be “qualified” expenses (as long as you have kept the receipts for your purchases).

If you have a Health Flexible Spending Account, you should soon be able to purchase OTC medications using your Flex Debit Card. But it may be several months before merchants will have updated their Inventory Control Systems to recognize these items as eligible expenses. It will take time for all merchants to get their systems updated. So your card may work to purchase OTC medications at some merchants who have moved quickly to update their systems but may not be accepted for OTC medications at merchants who have not yet completed their system updates.

If you purchase OTC medications from a merchant who has not yet updated their inventory control system, just pay for your OTC medication with your personal funds (such as your personal credit card) and then submit a claim to Advantage Administrators along with a copy of your store receipt showing the date of purchase, the name of the store, the name of the item purchased and the cost. Claims (including a copy of the store receipt) can be submitted:

  • through our mobile app
  • on-line ( by clicking on the Log In at the top right of our home page and then clicking on MyFlex under the Employee Logins section.
  • by fax at 319-352-2610 or 319-352-4018
  • by mail at Advantage Administrators, PO Box 118, Waverly, IA 50677-0118
  • by using our claims drop box outside our Waverly office (100 2nd Street SW)

We will ACH the money directly into your bank account. If you have not set up direct deposit with us you can do so through the on-line portal (sign in by following the directions provided above for submitted claims on-line) or by completing and submitting a Direct Deposit form. Paper copies of the Flex Claim form and Direct Deposit form can also be downloaded from the “Forms” section of our web site.

If you purchased OTC medications after January 1, 2020 you can be reimbursed for those purchases (if you have kept your receipts) by submitting a claim for reimbursement and attaching the receipt. If you have previously submitted a claim for OTC medications purchased in 2020 and the claim was denied, you will need to resubmit the claim. It will not automatically be re-processed.

Our customer service representatives are available from 8:00 to 5:00 (Central) Monday-Friday to help you. You can reach them at 800-383-1623.

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