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).
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 Purpose 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
- 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.
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
