If you have any prescription medications you take on a regular basis, you probably have a routine - go to the pharmacy, wait in line, hand over your insurance card and pay for the prescription with your debit or credit card.
Even with your insurance chipping in, chances are you end up paying a decent chunk of the bill out-of-pocket. If you're battling a chronic condition, those costs can really add up over time. But what if you could get that medicine at a cheaper price without using your insurance card?
It might sound crazy, but billing your insurance isn't always the most cost-effective option. Here's what you should know about the alternatives, and how your FSA card can save you even more.
Pay for prescription medicine instead of using insurance
A recent investigative report from The New York Times and ProPublica found that 40 common prescriptions were cheaper using GoodRx, a prescription discount card, than billing insurance.
GoodRx is the most common type of prescription discount card, and it's completely free. Blink Health, SingleCare and WellRx are some of the other cards available. All you have to do is print one out or have it mailed to you.
These discount cards only apply if you don't bill the prescription to your insurance. Here's how it works: You fill the prescription at a pharmacy, present the GoodRx or similar discount card and then pay for the remainder with your FSA card. Some pharmacies will even have the cards sitting out for anyone to use.
Discount prescription services list their prices before you buy, so you can see if it will be cheaper than using insurance and which pharmacy has the best price. As with most cost-saving measures, shopping around is a step toward saving the most money.
Pay for over-the-counter medicine
You can use your FSA card to pay for over-the-counter (OTC) medicine if a qualified professional has prescribed it (note that OTC items which do not contain an active medical ingredient will not require a prescription and you can shop for thousands of qualified items here). The prescription must be written before you buy the drug and generally within the FSA plan year in which you purchase it. .
You can use your FSA card when you buy the item at the drugstore. You can also pay with a regular debit or credit card and then request reimbursement from your FSA provider. Keep the receipt and the prescription to prove it's a qualified medical expense.
Pay for prescription medicine after insurance
If billing your insurance is still the cheapest way to buy a prescription, you can use your FSA card to save even more money.
When you fill the prescription, give the pharmacist your insurance card. They'll run the prescription and bill you for any leftover amount. You can pay for that directly with your FSA card or use a debit or credit card and then file a claim with your FSA provider. And of course, keep the receipt to prove it was an FSA-eligible expense.
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New to FSAs? Need a refresher course in all things flex spending? Our weekly Flex-Ed column gives you a weekly dose of FSA Living 101, offering tips for making the most of your tax-free funds. Look for it every Thursday, exclusively on the FSAstore.com Learning Center.
If you're like most folks, by this time of year, you may be sitting on a big pile of FSA money. According to our estimates, employees hand over up to $400 million of unused cash every year. Those are your hard-earned dollars disappearing back into your company's pockets.
Of course, you don't want to abandon these funds. But you don't want to blow it with your plan administrator, either. So, what's an FSA "hundredaire" to do? Start by checking out these tips.
Be strategic with your FSA balance
Spending down your FSA balance shouldn't be like an episode of "Supermarket Sweep." Instead, take a few minutes to make a list of all the things you actually need. (And if you haven't seen "Supermarket Sweep" make sure you do that right after creating the list.)
Smart spending could include replacing expired products. If you haven't purchased new glasses because the price tag scared you but you could benefit from an updated pair, now may be a good time to do it. For example, it's possible you don't have sunscreen for your upcoming cruise. If you're low on that ointment that your dermatologist recommended, call their office for a prescription.
Once the panic of missing your FSA deadline dies down, it may be easier to remember all the things you've been too frugal to buy.
Your year-end FSA shopping spree could be scrutinized
The problem with "use-it-or-lose-it" rules is by the time you learn them, it may be too late. Or you hear about them with only a few days to spare. And the latter can lead to sprinting through the aisles of your local drugstore, pitching dozens of family-sized boxes of band-aids into your cart. Both are far from ideal — and stockpiling could get the stink eye from your administrator.
As a general rule of thumb, resist the urge to buy more than three of any single item. It's common for folks to try to stockpile over-the-counter items in December to spend down their FSA balances. But doing so could backfire and your plan administrator may not reimburse you.
If you know you will use the products within the plan year, that's may be enough to pass your plan administrator's sniff test. You are less likely to see a claim rejection if you buy reasonable amounts of FSA-eligible products.
If you're still worried, you can always contact your plan administrator first. Asking them for the specifics of what FSA spending is and it's allowed may ease your mind. If you received a copy of your Summary Plan Description during open enrollment, it may also spell out these rules, too.
Keep a list for next year's FSA spending
Once your FSA deadline passes, the clock starts ticking again for next year's spending. There is always room for improvement, and the end of the year is the perfect time for reflection. If you're not happy with this year's spending, shift next year's priorities accordingly. Instead of beating yourself up for past mistakes, take the opportunity to learn from them. The new year is a chance to start fresh and avoid a big balance next December.
Whether you budget week-to-week, or plan to use your FSA for bigger things, our weekly Real Money column will help you maximize your flex spending dollars. Look for it every Tuesday, exclusively on the FSAstore.com Learning Center. And for the latest info about your health and financial wellness, be sure to follow us on Facebook, Instagram and Twitter.
How does the FSA prescription process work? Do you have a prescription item that requires FSA reimbursement? Read more about that exact process on our blog.
Update: As of March 2020 with the passage of the CARES Act, the OTC Rx requirement has been repealed and prescriptions are no longer necessary to purchase over-the-counter medicines with an FSA or HSA. Additionally, menstrual care products like tampons and pads are fully FSA-/HSA-eligible. Learn more here.
"Do I need a prescription for Advil? Why and how does that work for my Flexible Spending Account?"
Flexible Spending Accounts (FSA) and Health Savings Accounts (HSA) are among the most popular employee benefit add-ons available. Both can cover medical products and services, but there is one aspect of these plans that consumers find consuming: the reimbursement process for Rx items. A keyadjustment to the reimbursement process of over-the-counter (OTC) medications with these accounts in recent years continues to cause confusion for a lot of people.
As of January 1, 2011, the IRS put into place regulations regarding the purchase of OTC medicines, and these could include pain relievers or antacids (basically any item containing an active medical ingredient).
At first glance, that may sounds like a ton of extra work to purchase the products you and your family need, but the prescription process couldn't be easier at FSAstore.com! We make it easy for you to process the prescriptions and order the items you need.
How do I get started if I need to get reimbursed with an FSA? Can FSA Storehelp me process an FSA prescription?
Before your next doctor's appointment, be sure to check out the Eligibility List available to search through hundreds of products and services to find out their FSA prescription process for reimbursement. When you make a purchase of an OTC medicine, you or your doctor can mail or fax the prescription to our pharmacy partner. Be sure to plan ahead -- for products you use often, request multiple refills so you can re-submit an order quickly and easily in the future.
Last but not least, if you don't have a doctor's appointment on the horizon, FSAstore.com can contact your doctor directly. Simply provide us with your physician's name, address and phone number, and we'll handle the rest through our Rx Process!
With copies of these prescriptions, claim forms, receipts and anything else your benefits administrator needs, you'll be well on your way toward full reimbursement for your purchases.
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