FSA and HSA: Which OTC Products Can You Actually Buy With Pre Tax Dollars?

The Difference Between an FSA and an HSA

Before getting into what you can buy, it is worth clarifying the difference between these two account types because the rules for using them have some important differences.

Flexible Spending Account (FSA) An FSA is offered through your employer as part of your benefits package. You contribute pre tax dollars from your paycheck up to an annual IRS limit, $3,300 for 2025 for an individual. Your contributions reduce your taxable income, which means you are effectively buying eligible health products with dollars that were never taxed.

The key limitation of an FSA is the use it or lose it rule. Funds not spent by the end of the plan year, or a grace period of up to 2.5 months that some employers offer, are forfeited. Some plans allow a rollover of up to $660 in unused funds. But if you have a significant FSA balance approaching year end, spending it on eligible OTC products before it expires is both smart and straightforward.

Health Savings Account (HSA) An HSA is available only to people enrolled in a High Deductible Health Plan (HDHP). Contributions are pre tax, grow tax free, and, critically, roll over indefinitely from year to year. Funds never expire. The annual contribution limit for 2025 is $4,300 for an individual and $8,550 for a family.

Because HSA funds roll over and grow tax free, an HSA is also one of the most powerful long term health investment accounts available. Many financial advisors recommend maximizing HSA contributions and investing the balance rather than spending it immediately, saving it for future healthcare expenses including retirement healthcare costs.

What Changed in 2020

Before March 2020 FSA and HSA funds could only be used for OTC medications and products if the patient had a written prescription from a physician. This created a cumbersome process where patients had to obtain prescriptions for things like ibuprofen, allergy medication, and cold medicine, medications available without a prescription, in order to use their pre tax accounts to pay for them.

The CARES Act of 2020 permanently eliminated the prescription requirement for OTC drugs and medicines. This means you can now purchase virtually any OTC drug or medicine with your FSA or HSA card without obtaining a prescription first.

The CARES Act also added menstrual care products as a permanent FSA and HSA eligible category, a change that benefited millions of people who had previously been unable to use pre tax dollars for these expenses.

What Is Eligible: OTC Drugs and Medicines

Under current IRS guidance the following categories of OTC drugs and medicines are FSA and HSA eligible without a prescription:

Pain and fever relief Acetaminophen, ibuprofen, naproxen, aspirin, all eligible. This includes both name brand products and their generic equivalents. The Fairview Pain Relief Authority collection is fully eligible.

Allergy and sinus relief Oral antihistamines including loratadine, cetirizine, and fexofenadine. Nasal corticosteroid sprays including fluticasone and triamcinolone. Nasal decongestants. Allergy eye drops. The complete Breathe Easy Defense collection qualifies.

Cold and flu products Multi symptom cold and flu products, cough suppressants, expectorants, throat lozenges, and similar products are eligible.

Digestive health products Antacids, proton pump inhibitors like omeprazole, anti diarrheal medications, anti gas products, and laxatives are all eligible.

Sleep aids OTC sleep aids are eligible.

First aid products Bandages, gauze, antiseptic products, antibiotic ointment, hydrocortisone cream, and similar first aid supplies are eligible.

Diagnostic devices Thermometers, blood pressure monitors, blood glucose meters, and similar diagnostic devices are eligible.

Contact lens care products Contact lens solution and related products are eligible.

Sunscreen Sunscreen products with SPF 15 or higher are eligible, an expansion that was made permanent under the CARES Act.

Feminine hygiene products Pads, tampons, menstrual cups, and similar products are eligible.

What Is Not Eligible

Understanding what does not qualify is equally important for avoiding rejected FSA and HSA card transactions:

General health and wellness supplements Vitamins, minerals, and dietary supplements are generally not FSA or HSA eligible unless they are recommended by a physician for a specific diagnosed condition, in which case a Letter of Medical Necessity from the physician may make them eligible. Standard daily vitamins, omega 3 supplements, and probiotics purchased for general wellness purposes are not eligible without a physician’s documentation.

Cosmetic products Skincare products that are primarily cosmetic, moisturizers, anti aging creams, teeth whitening products, are not eligible even if they have some incidental health benefit.

Toothbrushes and toothpaste Standard oral hygiene products are not eligible. Prescription fluoride treatments may be eligible with documentation.

Gym memberships and fitness equipment General fitness and wellness expenses are not eligible.

Food and beverages Including special dietary foods, with limited exceptions for specific medically necessary diets documented by a physician.

The Letter of Medical Necessity

For products that are not automatically FSA or HSA eligible, including vitamins and supplements recommended for

For products that are not automatically FSA or HSA eligible, including vitamins and supplements recommended for a specific diagnosed medical condition, a Letter of Medical Necessity from your physician can make them eligible.

A Letter of Medical Necessity is a written statement from your prescribing physician documenting that a specific product is medically necessary for the treatment of a diagnosed condition. Examples where this is commonly used:

Magnesium supplementation recommended by a physician for documented hypomagnesemia or migraine prevention. Vitamin D supplementation prescribed for documented vitamin D deficiency. Omega 3 fatty acids at prescription doses for documented hypertriglyceridemia. Probiotics recommended following a documented course of antibiotic therapy. CoQ10 recommended by a cardiologist for a patient on statin therapy.

If your physician has recommended a specific supplement for a documented clinical reason, ask them for a Letter of Medical Necessity. That letter, kept on file with your FSA or HSA administrator, may make otherwise ineligible supplements eligible for pre tax purchase.

At Fairview we are happy to help you identify which of your supplement purchases might qualify with appropriate physician documentation and to provide your physician with the product information they need to complete the letter.

How to Maximize Your FSA Before Year End

For FSA holders approaching year end with unspent funds the following purchases are all fully eligible and immediately practical:

Restock your home medicine cabinet. Pain relievers, allergy medications, cold and flu products, digestive health products, and first aid supplies all qualify. The Fairview Wellness Shop collections, Breathe Easy Defense, Pain Relief Authority, Gut Relief Authority, and Skin and Wound Defense, are all FSA eligible.

Purchase a home blood pressure monitor. Eligible diagnostic devices include blood pressure cuffs, which are a genuinely useful investment for any adult with hypertension risk factors.

Stock your emergency preparedness kit. OTC medications included in an emergency preparedness kit are eligible, making a pre year end purchase of the Fairview Emergency Preparedness Kit a smart FSA spend.

Purchase sunscreen for the year ahead. SPF 15 and above sunscreen is eligible and does not expire quickly, stocking up before your FSA year end is a practical strategy.

Buy a digital thermometer and first aid restocking supplies. Both fully eligible and practically useful for any household.

The Tax Savings Are Real

To make the financial benefit concrete: if you are in the 22 percent federal tax bracket and you spend $500 on FSA eligible OTC products using pre tax FSA dollars, you save approximately $110 in federal income tax on those purchases alone, plus applicable state income tax savings where applicable.

For HSA holders in the same bracket who maximize their $4,300 annual contribution, the annual federal income tax savings on contributions alone is approximately $946. Over a decade of maximizing contributions and investing the balance, the compounding tax advantage of an HSA is one of the most powerful financial tools available to most American households.

This is not complicated financial advice. It is arithmetic. The products you are already buying for your health cost less when you buy them with pre tax dollars. The mechanism to do that exists and is available to you right now.

This article is for general information only and is not a substitute for personalized medical advice. Before starting or changing any medication, including over the counter products and supplements, talk with your pharmacist or physician about your specific situation.