Prescription Drugs and Medicines: FSA Eligibility
What are prescription drugs and medicines?
Some drugs and medicines must be prescribed to treat a disease or condition. They may be brand-name or generic. A prescription is required for prescription medicine because of their considerations for safety, abuse potential, and ease of self-management. The drug's therapeutic index is a major factor in determining whether a drug can be sold Over-the-Counter (OTC) or must be prescribed (U.S. Food and Drug Administration).
The therapeutic index describes the range of effects on the user between dosages that effectively treat, relieve or alleviate a medical condition or disease, and the dosages that produce side effects or harm.
Abuse potential describes a drug's potential for inappropriate use in order to produce unintended side effects such as drug intoxication, or a high.
Ease of self-management describes a drug's likelihood of needing to its dosage adjusted to remain effective and safe for the user. Over-the-Counter (OTC) drugs typically can be taken in manageable dosages, whereas prescription drugs may require more specific dosages that can't be effectively stocked in drug stores, or may be too dangerous if taken in the wrong amount.
Why do OTC drugs and medicines require a prescription for reimbursement?
Today, a huge variety of over-the-counter (OTC) medicines are sold in grocery stores, supermarkets and pharmacies throughout the U.S. that can treat a wide range of potential ailments. Everything from analgesics (pain relievers) to antacids to antihistamines have historically been covered by consumer-directed healthcare accounts, but in light of the passage of the Patient Protection and Affordable Care Act (PPACA), a series of changes have been put into place regarding the reimbursement of common drugs and medicines that can alleviate a wide variety of common maladies.
As of January 1, 2011 when the PPACA went into effect, any drugs and medicines that are sold over the counter (excluding insulin) will require a prescription for each product for reimbursement through consumer-directed healthcare accounts like FSAs, HSAs and HRAs. This provision was put in place to prevent mass orders and "stocking up" on specific products by requiring individuals to get prescriptions for individual products, which in turn would increase government revenue by billions. However, it's important to note that this regulation only affects OTC drugs and medicines, while other OTC medical products, such as bandages, contact lens care and other first aid products are available for reimbursement without requiring a prescription.
It's important to understand that if a drug or medicine requires a prescription to treat, prevent or alleviate a medical condition or disease, then it's already eligible for reimbursement with a consumer-directed healthcare account and there is no additional process required in the same way as with OTC drugs and medicines.