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Qualifying Medical Expenses Definition Expanded by CARES Act

qualifying medical expenses

2 minute read

The CARES Act was made into law in late March, providing federal funding to address the COVID-19 crisis. In addition to providing direct financial assistance to Americans, it also repealed a provision of the Affordable Care Act (ACA).

The Medicine Cabinet Tax, part of the ACA, stated that people could not use their medical savings accounts (FSA, HSA, or HRA) to purchase non-prescription, over-the-counter medicines. Under the tax, only prescription medicines were considered qualified medical expenses.

The CARES Act has updated this definition to include certain over-the-counter (OTC) medications and feminine hygiene products. A prescription is no longer required for reimbursement from a medical savings account. This is a permanent change and includes any purchases made after December 31, 2019.

Characteristics for OTC drugs include:

  • The item or product has an acceptable margin of safety
  • The item or product has low potential for abuse/misuse when widely available
  • A healthcare practitioner is not needed for the safe and effective use of the product
  • The product is labeled adequately (active ingredients, purpose, instructions, warnings, expiration date, storage guidelines, etc.)
  • Eligible OTC medications may include pain relief medications, cold and flu products, allergy products, heartburn medications, and other similar items
  • Nutritional supplements, herbal remedies, and vitamins are not considered drugs or medications by the FDA and are therefore only reimbursable with a doctor’s note, prescription, and/or letter of medical necessity

Menstrual care products include:

  • Tampons, pads, liners, cups, sponges, or other similar items

Download the bulletin for more details. Here’s the revised list of eligible over-the-counter items and services that are now covered.

NIS Learning Series - Medical Savings Accounts: Which Ones Work for Public Sector Employers?

This blog is intended to be a compilation of information and resources pulled from federal, state and local agencies. This is not intended to be legal advice. For up to the minute information and guidance on COVID-19, please follow the guidelines of the Centers for Disease Control and Prevention (CDC) and your local health organizations.


National Insurance Services is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Readers are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the readers’ business activities.

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Adam Kuck

Adam Kuck

The first things you will notice about Adam Kuck are how personable and organized he is. As your Account Representative, Adam will be on hand to walk you through your group's plans, conduct employee and retiree meetings, and be your advocate when a problem arises. Adam first joined National Insurance Services (NIS) in 2013 as an intern in the Marketing Department. He enjoyed NIS’ company culture and team values so much that he later applied and was hired as a Retirement Income Account Representative for NIS and MidAmerica Administrative & Retirement Solutions. Adam specializes in Health Reimbursement Arrangements (HRAs), Flexible Spending Accounts (FSAs), and 403(b) Special Pay Plans (SPP) for clients in Minnesota, Pennsylvania, and Oklahoma. He is a licensed Health and Life insurance agent.