Can I Use My FSA or HSA to Buy Over-the-Counter Medications Such As Tylenol?
Key takeaways:
Health savings accounts (HSAs) allow qualified individuals to use pretax dollars to buy over-the-counter (OTC) medications that they would normally pay for out of pocket.
If you don’t have an HSA, you can also use a flexible spending account (FSA) to purchase qualified OTC medications.
The CARES Act expanded the list of HSA- and FSA-eligible items to include over-the-counter medications including allergy, cough, and pain medication.
Over-the-counter (OTC) medications are drugs you can buy without a prescription. You can buy them from a pharmacy, grocery, or low-cost retail store.
Before the Coronavirus Aid, Relief, and Economic Security (CARES) Act, you could not buy OTC medications with your flexible spending account (FSA) or health savings account (HSA) funds. The law allows you to use your tax-advantaged health account to buy popular OTC drugs, such as allergy, cough, and pain medicines. You may even be eligible to purchase vitamins with your FSA or HSA, if you have the required documentation.
Below, we will look at 74 popular OTC medications that are FSA- or HSA-eligible.
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Can I buy OTC medicine such as Tylenol and Tums with my FSA or HSA?
Yes. You can buy OTC medicine such as Tylenol and Tums with your FSA or HSA. But this hasn’t always been the case.
OTC medications previously did not count as qualified medical expenses for HSAs unless you had a prescription. The law that dictated this, known as the Affordable Care Act (ACA, also called Obamacare), was enacted in 2010. It provided limits on the type of medicines that were FSA- or HSA-eligible.
For example: Let's say you were experiencing nasal congestion. You would not have been able to use your HSA money to cover an OTC medication such as Mucinex. Instead, you would have had to dip into your earnings or savings to cover the expense.
Effective January 1, 2020, OTC medications such as Mucinex, Sudafed, and Tylenol Cold + Flu are all HSA-eligible without a prescription.
CARES Act expansion
The CARES Act went into effect in March 2020 as a response by Congress to the coronavirus (COVID-19) pandemic.
One measure of relief that Congress added was the expansion of qualified medical expenses. Menstrual products and OTC medications were added to the list. Now, everyday medications that you purchase out of pocket in the grocery store are HSA- and FSA-eligible. Some stores may even have a label near common OTC medicines showing that they are FSA- or HSA-eligible.
Health savings account (HSA) vs. flexible spending account (FSA): Find out if an HSA or FSA is right for you.
How do HSAs work? If you meet certain requirements, you can contribute money to an HSA. Find out how this type of account works.
Are you maximizing your HSA benefits? Here are some HSA benefits that you might not be taking advantage of.
FSA-eligible meds
A flexible savings account (FSA) is an employer-sponsored account that lets you pay for qualified healthcare expenses with tax-free dollars. Employees can contribute pretax dollars up to the annual limit.
The annual FSA contribution amount is predetermined before the year starts. For 2024, you can contribute up to $3,200 for individual coverage. You typically lose the amount you contribute if you switch employers or don’t use the funds by the end of the year. Depending on your employer’s rules, you may be able to carry over some or all of your funds to the next plan year. Below are the maximum health FSA contribution limits and maximum allowed carry-over amounts.
Year | Maximum health FSA contribution per person | Maximum allowed carry-over |
|---|---|---|
2024 | $3,200 | $640 |
2023 | $3,050 | $610 |
Before you make a purchase with your FSA, you should confirm that your expense is qualified. There are different types of OTC medications you can access based on your needs. You no longer have to wait for a doctor’s prescription to use your FSA or HSA dollars for OTC medications. For example, let’s say you have an FSA and are experiencing heartburn. The following are FSA-eligible heartburn medications you can buy:
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You can also use your FSA funds for the following dental medications and treatments:
Benzodent
Curoxen
Efferdent
Orajel
Polident
Poligrip
If you need OTC medications for skin care needs, such as acne and eczema treatments, you have options. Some common FSA-eligible acne medications you can purchase OTC are:
Aveeno Clear Complexion Foaming Cleanser
CeraVe Acne Control Gel
Clean & Clear Essentials Dual Action Moisturizer
Clearasil Rapid Rescue Deep Treatment Pads
Neutrogena Clear Pore Oil-Eliminating Astringent
Neutrogena Oil-Free Acne Wash
OXY Acne Care skin treatment pads
If you have an HSA instead of an FSA, you can still purchase approved OTC qualified medical expenses with your pretax funds.
HSA-eligible meds
A health savings account (HSA) allows individuals to contribute pretax dollars during the year to pay for qualified medical expenses. This account is only available to individuals with a high-deductible healthcare plan (HDHP).
There are limits to how much you can contribute every year. It all depends on the number of months you were considered HSA-eligible.
For 2024, you can contribute up to $4,150 for individual coverage if you are under age 55. That number goes up to $4,300 in 2025.
If you are 55 or over, you can contribute an extra $1,000 a year.
Any funds not used by the end of the year roll over to the next year.
Unlike with an FSA, an individual owns this tax-advantaged account. You can take your HSA with you if you decide to leave your job. You can even open an HSA if you are self-employed and have an HDHP.
Common OTC pain medications that you can buy with your HSA funds include:
Anacin
Bayer
Ecotrin (arthritis)
Hyland’s Earache Drops
Icy Hot pain-relief patches
Midol
Motrin
Neosporin + pain relief cream
Nuprin
Pamprin
Percogesic
Similasan Computer Eye Relief
Tylenol PM
You can also use HSA funds to buy Azo, FemiClear, and Monistat, to make symptoms of a urinary tract infection (UTI) more bearable.
Allergy season can be a drag. HSA funds can be used to purchase allergy medicines, such as:
If you are struggling with a cold or cough, examples of OTC medications that you can purchase with your HSA include:
Chloraseptic
DayQuil
Delsym adult cough suppressant liquids
Dimetapp
Halls cough drops
NyQuil Cold & Flu
Ricola cough drops
Robitussin
RoboCough cough suppressant
Sambucol Cold & Flu Relief
Your HSA can also cover OTC medication for your little ones. You can purchase these HSA-eligible medications to help your child feel better:
Advil Junior Strength Chewables
Children’s Allegra Allergy
Children’s Tylenol
Children’s Dimetapp Cold & Cough
Hyland’s 4 Kids Complete Allergy
Mucinex Children’s Cough Mini-Melts
Zarbee’s Naturals Cough Syrup
The bottom line
The CARES Act expanded the list of HSA- and FSA-eligible items to include OTC medications. You no longer need a prescription to buy these items using a tax-advantaged health account. Now, you can save money on popular OTC items — such as pain relievers, cold and cough medicines, and qualified acne products — by using your HSA or FSA. Before you make a purchase, it’s important to confirm if your item is a qualified HSA or FSA expense.
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References
Internal Revenue Service. (2022). Affordable Care Act: Questions and answers on over-the-counter medicines and drugs.
Internal Revenue Service. (2023). Publication 502 (2023), medical and dental expenses.
This article is solely for informational purposes. This article is not professional advice concerning insurance, financial, accounting, tax, or legal matters. All content herein is provided “as is” without any representations or warranties, express or implied. Always consult an appropriate professional when you have specific questions about any insurance, financial, or legal matter.
