Band-Aids: FSA Eligibility

Band-Aids are over-the-counter (OTC) items that do not require a prescription for reimbursement with a flexible spending account (FSA), health savings account (HSA) or a health reimbursement arrangement (HRA). Band-Aids are not eligible for reimbursement with a limited care flexible spending account (LCFSA) or a dependent care flexible spending account (DCFSA).

What are Band-Aids?

The term, Band-Aids, is both a trademark for bandages, as well as a phrase that has entered our shared nomenclature as both a catch-all term for treatment for minor cuts and scrapes and as a verb describing a temporary fix to a problem. These adhesive bandages come in countless sizes, designs and variants, and while they are nearly ubiquitous in today's society, they are an innovation that has roots in the early 20th century.

Today's Band-Aids were invented in 1920 by a Johnson & Johnson employee named Earle Dickson, who worked as a cotton buyer for the company. Dickson was a newlywed living in New Brunswick, New Jersey, with his wife Josephine. As a housewife, Josephine was prone to minor cuts and burns from cooking and other household chores, and in an effort to treat them, the couple would cut out gauze and adhesive tape to make improvised bandages.

This was obviously very time-consuming, so Earle came up with a better solution by placing small pieces of cotton gauze in the middle of an adhesive strip. Earle told his boss about his intuitive invention and soon they began to be sold under the Band-Aid trademark, and Earle would be rewarded with a vice president position at Johnson & Johnson that he held until his retirement. Whether for at-home use, at a hospital or first-aid kit, these ubiquitous adhesive bandages have made immediate medical care possible for anyone (Johnson & Johnson Consumer Inc.).

Why do Band-Aids not require a prescription for reimbursement?

As a result of the passage of the Patient Protection and Affordable Care Act (PPACA), as of January 1, 2011, a new set of uniform standards were put into place regarding the reimbursement of medical expenses. To reimburse the cost of OTC medicines and drugs under FSAs, HSAs and other consumer spending accounts, account holders must submit a prescription from a physician for each product.

However, Band-Aids are not covered under this distinction, despite their status as OTC medical products. Under IRS 213(d)(1), Band-Aids are products that are reimbursed for "medical care includes amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function in the body." Band-Aids are considered medical equipment, supplies or devices, and therefore do not require the same prescriptions as OTC medicines.

Eligibility Table

Flexible Spending Account (FSA) Limited Care FSA Dependent Care FSA Health Savings Account (HSA) Health Reimbursement Account (HRA)


Eligible with Rx

Eligible with LMN

Not Eligible

Specifically Not Covered

No prescription required.

Legal Information / Regulations

Under IRS ' 213(d)(1), "medical care includes amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body." This includes medical equipment, supplies and devices.


AZ-PROD-WEB02 6/18/2018 2:14:05 AM