As the end of the year approaches and employees enrolled in Section 125 FLEX PAY PLANS calculate the dollars left in their flexible spending account (FSA) or healthcare spending accounts (HSA) due to the “Use it or lose it” policy, it is a good time to remember that MigreLief is considered an OTC (over the counter) item that qualifies for reimbursement under your flex-pay plan.
Pursuant to Revenue Ruling 2003-102, over-the-counter drugs that are used to alleviate or treat personal injuries or sickness are now reimbursable through health care flexible spending accounts. Employees’ flex pay pretax contributions are not subject to federal, state, or social security taxes. In general, individuals must use funds from a flexible spending account for medical care. Medical care is for the diagnosis, cure, mitigation, treatment or prevention of disease, OR for the purpose of affecting a structure or function of the body (section 213(d) of the Internal Revenue Code).
Flexible Spending Accounts
Per the IRS – Eligible expenses include, “Dietary supplements or herbal medicines to treat medical conditions in narrow circumstances.”
MigreLief qualifies however, as of 2011 qualifying OTC items require a note from your doctor.
Many MigreLief users have been prescribed MigreLief by a neurologist, general practitioner or other healthcare professional for medical purposes. If you use MigreLief for managing your migraines, approach your healthcare practitioner for a prescription to be placed on file with your flex-pay plan administrator so you can purchase it monthly with your pretax dollars.
Studies have shown that employees on average lose approximately $100 annually in forfeited balances within their employee health care flex spending accounts because any money remaining in your flexible spending account on Dec 31 disappears and is retained by your employer.
If you have money in your flex-pay account at year end, stock up on MigreLief or other items from the list below to avoid losing those dollars.
Many other OTC items you may not have considered also qualify for reimbursement with a note from your doctor. The following is a list of common non-prescription over-the-counter items the IRS has determined to be primarily for medical care and eligible for reimbursement, and dual purpose items that are reimbursable with a physician’s statement.
Note: This list does not include all reimbursable items but is the best guidance provided by the Internal Revenue Service to date.
ELIGIBLE EXPENSES
Allergy medicine
Antacids
Bactine
Band-Aids/bandages
Anti-diarrhea medicine
Bug-bite medication
Calamine lotion
Carpal-tunnel wrist supports
Cold medicines
Reading glasses
Cold/hot packs for injuries
Condoms
Contact lens cleaning solution
Cough drops
Spermicidal foam
Diaper rash ointments
First aid cream/First aid kits
Hemorrhoid medication
Incontinence supplies
Laxatives
Liquid adhesive for small cuts
Menstrual cycle products for pain/cramps
Motion sickness pills
Muscle or joint pain products
Nasal sinus sprays/strips
Nicotine gum/patches for stop-smoking
Pain relievers
Pedialyte for ill child dehydration
Pregnancy test kits
Rubbing alcohol
Sinus medications
Sleeping aids to treat insomnia
Sunburn ointments or creams
Thermometers (ear or mouth)
Throat lozenges
Visine and other eye products
Wart remover treatments
Dual purposes OTC items
The following list of dual-purpose over-the-counter items can be reimbursed if used for medical purposes. They must be accompanied by a medical practitioner’s note stating the item is to treat a specific medical condition and not a cosmetic procedure.
Acne treatment (Retin A) only to treat a specific medical condition such as acne vulgaris
Dietary supplements or herbal medicines to treat medical conditions in narrow circumstances
Fiber supplements under narrow circumstances
Glucosamine/chondroitin for arthritis or other medical conditions
Orthopedic shoes and inserts (only the cost difference between orthopedic and nonorthopedic shoes will be reimbursed)
Hormone therapy and treatment for menopause symptoms such as hot flashes and night sweats
Pills for lactose intolerance
Prenatal vitamins
St. John’s Wort for depression
Sunscreen
Weight-loss drugs to treat a specific disease including obesity
Medical expenses eligible for reimbursement under a Section 125 cafeteria plan
Acupuncture
Adoption related medical costs
Air conditioner filters for allergy relief (supplied by online Goodman furnace and AC)
Alcoholism treatment
Ambulance services
Attendant for blind or deaf student
Autoette
Birth control pills
Blind persons accessories (seeing eye dog, Braille training, special schooling)
Capital expenditures (home modifications for handicapped)
Car modifications for handicapped
Childbirth prep classes (mother only)
Chiropractors
Christian Science treatment
Contact lenses (including replacement insurance)
Cosmetic Surgery (non-elective only)
Crutches
Deaf persons accessories (hearing aids, special schooling)
Dental fees
Dentures
Diagnostic fees
Doctors’ fees
Domestic aid (in home nurse)
Drug addiction treatment
Dyslexia language training
Electrolysis (medical reasons only)
Elevator for cardiac conditions
Eye exams and glasses
Fertility enhancement
Fluoride device
Guide animals
Hair transplant (surgical and medical reasons)
Hearing aids
HMO’s
Hospital care (in-patient)
Indian medicine man
Insulin
Insurance premiums (medical post-tax only)
Iron lung
Lab fees
Laetrile (legal use)
Laser eye surgery
Lead paint removal
Learning disability (doctor recommended special schooling fees)
Legal expenses related to medical condition
Lifetime medical care prepaid-retirement home
Limbs (artificial)
Lodging (for medical care away from home)
Long Term Care Services (qualified medical only)
Meals (medical care away from home)
Medical conferences (relating to illness)
Nursing home (medical reasons)
Nursing services (home care)
Operation (legal, including abortion)
Organ Donor
Orthodontia
Orthopedic shoes
Osteopaths
Oxygen equipment
Prescription Drugs
Psychiatric care
Psychotherapists
Sexual dysfunction treatment
Sterilization
Stop Smoking Programs (and related stop smoking prescription drugs only)
Swimming pool (for polio or arthritis treatment)
Telephone equipment (for hearing impaired)
Television close caption prescribed by doctor
Vasectomy
Weight loss programs (doctor prescribed for medical reasons)
Wheelchair
Wigs (alleviation of physical or mental discomfort)
X-rays
Are you opted into your company’s Flex-Pay Plan?
If you have not opted in to your firm’s flex-pay plan, you may want to consider it during the next enrollment period. Many other items you use regularly may be covered and it is a good way to cut taxes. In many cases it is permitted to add or a portable air conditioner to the plan. Consult the portable air conditioner guide for all the details.
Though some flex pay plans offer an explicit choice of cash or benefits, most today are operated through a “salary redirection agreement”, which is a payroll deduction in all but name. Deductions under such agreements are often called pre-tax deductions because salary redirection contributions are not actually or constructively received by the participant. Therefore, those contributions are not generally considered wages for federal income tax purposes, nor are they usually subject to Federal Insurance Contributions Act tax (FICA) and Federal Unemployment Tax Act (FUTA).
So remember to save your receipt the next time you purchase MigreLief and submit it along with a note from your doctor for reimbursement.
~ The MigreLief Team
