WASHINGTON-Treasury and the Internal Revenue Services announcedlast week that withdrawals from health card flexible spendingaccounts are appropriate on over-the-counter medications. Treasuryand IRS issued guidance clarifying that reimbursements fornonprescription drugs by an employer health plan are excluded fromincome and, therefore, acceptable for FSAs if properlysubstantiated by the employee. “Flexible Spending Accounts are animportant tool in helping people meet their health care costs,”Treasury Secretary John Snow stated. “Since many prescription drugshave moved to the over-the-counter market, this action today makespaying for them a little bit easier to swallow.” “This action is asensible expansion and simplification of the program consistentwith existing law,” IRS Commissioner Mark W. Everson said.

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