As we talked about last spring, new rules went into effect this year that prohibit the use of flexible spending account dollars for the purchase of over-the-counter medications. Now there's a movement to repeal the provision, as recently reported by Kaiser Health News:
The repeal effort will move ahead next week when Sen. Kay Bailey Hutchison, R-Texas, and Rep. Erik Paulsen, R-Minn., are expected to file bills that would allow FSA money to once again pay for OTC medications. The legislation also would eliminate the law’s $2,500 annual limit on contributions to FSAs, a provision that takes effect in two years. Currently, employers decide limits.
Some of the largest of the 500 companies that administer FSAs, as well as drug makers and business groups, are organizing and funding the drive to change the law, which they say may reduce the number of people using these accounts.
Previously: New rules on flexible spending accounts ban the purchase of OTC drugs (without a doctor's note)