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How do I get a "prescription" for an over-the-counter drug in order to pay for it with my HSA?

Next time you go to the doctor, ask for a prescription or a letter of medical necessity for over-the-counter drugs you need. You won't be the first patient to make such a request, so your physician should be prepared to respond.

As you know, without a prescription from a doctor and a receipt, you can't be reimbursed for the cost of over-the-counter drugs through a health savings account (HSA), flexible spending account (FSA) or Archer medical savings account as of Jan. 1, 2011.

The new rule was among the many provisions of the Affordable Care Act passed by Congress in 2010, and it applies to hundreds of products, including pain relievers, allergy medications, sleep aids and cold and flu remedies.

However, the rule does not apply to insulin; medical equipment, such as crutches; supplies, such as bandages; and diagnostic devices, such as blood sugar test kits. You still can get reimbursed for these without a prescription. Read the information from the administrator of your medical insurance plan for more details and instructions for submitting a claim.

In general, though, you'll need to provide a receipt, as well as proof of prescription when you submit a claim to your HSA for over-the-counter drugs. What happens if you use the money without a prescription? The amount will be counted as part of your gross income and subject to an additional 20 percent tax.

If you haven't submitted a claim for over-the-counter drugs purchased last year, there's still time. The rule change applies only to medication purchased in 2011, so you can still get reimbursed for over-the-counter drugs purchased through Dec. 31, 2010, without a prescription.

With an HSA, money continues to build in the account from one year to the next; with an FSA, unused money is forfeited at the end of each year after a 2 1/2-month grace period. That grace period allows FSA holders to roll over unused money from the previous year to pay for expenses incurred during the first 2 1/2 months of the current year. However, FSA holders should be aware that the new rule requiring a prescription for over-the-counter drugs still applies during the grace period, even if the money was set aside for 2010.

For more, see new rules on HSAs may surprise you at the pharmacy.

Last updated: Mar. 1, 2011