CARES Act OTC Update

Signed into law on March 27, 2020, the CARES Act provides additional relief on certain benefit options, including Flexible Spending Accounts and some Health Reimbursement Arrangements.

  • Restrictions on over-the-counter (OTC) medications for FSAs and unrestricted HRAs are lifted under the CARES Act.  OTC medications are now reimbursable without requiring a prescription or completing a Letter of Medical Necessity Form. This provision is retroactive to January 1, 2020. Previously, OTC items were repealed under the Affordable Care Act. The new CARES Act overturns that rule. 
  • Menstrual care products are also now reimbursable as eligible expenses, including tampons and pads. 
  • Not all merchants will have newly eligible OTC/menstrual care products coded immediately for a point-of-sale debit card purchase. Some merchants may take longer to update their system.

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  • Your plan document must be amended to reflect the OTC change summarized above.  Additionally, a summary of the change must be provided to your participants.  Please contact your P&A Group account manager for further assistance. 
  • Important note: your FSA and unrestricted HRA will be administered with allowing OTC medications to be reimbursed.  If you do not wish to allow OTC medications to be reimbursed under your plan, please contact your P&A Group account manager.