<P> Another FSA feature that was introduced in 2003 is the ability to pay for over-the - counter (OTC) drugs and medical items . In addition to substantially expanding the range of "FSA - eligible" purchases, adding OTC items made it easier to "spend down" medical FSAs at year - end to avoid the "use it or lose it" rule . </P> <P> However, substantiation has again become an issue; generally, OTC purchases require either manual claims or, for FSA debit cards, submission of receipts after the fact . Most FSA providers require that receipts show the complete name of the item; the abbreviations on many store receipts are incomprehensible to many claims offices . Also, some of the IRS rules on what is and isn't eligible have proven rather arcane in practice . The recently developed inventory information approval system (IIAS), separates eligible and ineligible items at the point - of - sale and provides for automatic debit - card substantiation . </P> <P> The IIAS system references a master eligibility list of FSA eligible products at the point of sale . The Special Interest Group for IIAS Standards (SIG - IS) maintains this eligibility list and updates it on a monthly basis . </P> <P> The FSA Eligibility List includes items within eligible healthcare product categories determined by the IRS . Health Savings Accounts share the same medical item eligibility list as FSAs . The full list of eligible items is only available to members of SIG - IS, but specific product eligibility can be identified by the public on websites such as FSAstore.com and drugstore. com's FSA section . </P>

Who sets the eligibility requirements for a flexible spending arrangement (fsa)