The Medicine Cabinet Tax Is Repealed

Lawmakers used the CARES (Coronavirus Aid, Relief, and Economic Security) Act to permanently remove the so-called medicine cabinet tax. This means that HSAs, health flexible spending accounts (“FSAs”), and health reimbursement arrangements (“HRAs”) can once again reimburse the costs of over-the-counter drugs with no prescription. This provision is effective for expenses incurred and amounts paid after December 31, 2019.