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New rules on flexible spending accounts ban the purchase of OTC drugs (without a doctor's note)


Raise your hand if you've ever made a late-December run to Walgreen's to purchase jumbo-sized bottles of Tylenol or Tums in an effort to use up your flexible spending account dollars. If your hand is up, you'll want to pay attention to this: As NPR's Shots is reporting, new rules that go into effect next year will prohibit the use of these pre-tax dollars for the purchase of over-the-counter medications - unless you have a doctor's prescription. Shots explains the change was made to discourage wasteful health-care spending:

Edwin Park, a senior fellow at the Center on Budget and Policy Priorities, says FSAs encourage people to overuse the health care system since they can't roll over any unused balance from the previous year. They're often left scrambling at year's end to buy things they don't need or to see the doctor when they don't need to, he explained.

"It's encouraging a whole host of services whether they were medically needed or not," he said.

The piece also highlights another change: a $2,500 FSA contribution cap that is expected to raise $18 billion in revenue over 10 years. That money, it says, will help offset the costs of the recently passed health-reform law.

Photo by misterbisson

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