New ways to save more with your FSA or HSA

If you currently have a flexible spending arrangement (FSA) or a health savings account (HSA) through your employer, you probably appreciate knowing that you have some pre-tax savings stashed away in case you need them for a healthcare expense. FSAs and HSAs aim to provide convenient, affordable spending options, allowing employees to create accounts where they can deposit pre-tax funds during each pay period to cover out-of-pocket healthcare expenses.

New this year, you can use those funds to help pay for over-the-counter (OTC) medicines (without a prescription) and menstrual or feminine care products. The expanded eligibility to include these expenses was part of the Coronavirus Aid, Relief, and Economic Securities (CARES) Act passed in March 2020.

FSAs and HSAs can help reduce costs — if you use them

Unexpected healthcare costs can put a serious dent in your budget. And if you have healthcare expenses — whether you anticipate them or not — having an FSA or HSA can save you a lot. Americans with employer-sponsored insurance are increasingly funding more of their own healthcare expenses. On average, workers paid $6,015 for family coverage and $1,242 for single coverage in 2019, according to the KFF Employer Health Benefits Survey.

However, chances are good that you still have funds in these accounts that you haven’t yet been able to use this year. In fact, most FSAs work on a “use it or lose it” basis, resulting in over $400 million per year going unspent by employees. This new eligibility for coverage of OTC medicines (not requiring a prescription) and menstrual care products (including tampons, pads, cups and other products) provides consumers with even more options to spend these tax-free funds, which is good news for anyone trying to save on costs.

The other good news is that the law is retroactive, so if you still have receipts for any purchases of OTC medicines or menstrual care products from as far back as Jan. 1, 2020, you may be eligible to receive reimbursement of those funds by submitting the necessary paperwork to your FSA/HSA administrator.

Newly eligible products

OTC medicines offer safe, effective relief for a wide variety of symptoms and conditions, providing the first line of defense for families’ healthcare needs. In previous years, a prescription was needed to use FSA or HSA funds for these everyday products. Keep in mind, however, that OTC medicines should not be considered a substitute for consulting your healthcare provider, especially if you or a family member has concerning symptoms, such as any known coronavirus symptoms.

Menstrual products also provide necessary comfort and care for women, and add up to a surprisingly large expense. U.S. women altogether spend $3 billion per year on menstrual care products, according to the National Center for Health Research. also reports that women spend around $4,752 on tampons and pads throughout their lifetime, which doesn’t account for other menstrual health-related products they also use.

All of these products add up to a lot of additional costs. And during a time when more than 9 in 10 Americans feel anxious about finances amid the COVID-19 pandemic — with healthcare bills being one of the top 10 stressors, according to the National Endowment for Financial Education — finding new ways to save money helps relieve some of that stress.

Have questions, or don’t know if you or your particular expenses are eligible under your plan’s coverage? Contact your employer’s FSA/HSA administrator with questions about your eligibility and the eligibility of specific products, and visit to learn more.

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