Washington, D.C. -- Federal employees enrolled in the flexible spending program sponsored by the U.S. Office of Personnel Management can use their accounts to pay for non-prescription medicines beginning January 1, 2004.

Kay Coles James, Director of the U.S. Office of Personnel Management, said a ruling by the Internal Revenue Service in September that qualifies over-the-counter medications for reimbursement through employer-sponsored flexible spending accounts (FSA) will give an economic lift to consumers. Until the ruling, FSA account holders received reimbursement only for the non-covered costs related to the purchase of prescription drugs.

"The IRS ruling makes sense for consumers," said James. "This will save money for millions of consumers -- including federal employees -- who rely on a regular supply of decongestants, antihistamines and other frequently used medicines."

As with many FSA programs, the OPM-sponsored program also coversdependent-care costs for children. Expenses can be paid for children up to age 13, as well as for adults who qualify as dependents under IRS are regulations.

The OPM-sponsored FSA program took effect July 1, 2003, following an early-enrollment opportunity that signed-on approximately 31,000 members. An FSA open season for additional enrollments and a national education campaign begins November 10 and runs through December 8. The education campaign will be conducted by SHPS, the program's administrator, and held simultaneously with the Federal Employees Health Benefits Program annual open season.

"While the value of FSAs varies from person to person, the expansion of covered items certainly increases the likelihood that these accounts will become more attractive to an even larger population of employees," said James. "This fact certainly will help government in its competition with the private labor market to attract qualified people into public service. OPM is committed to educating the work force on the wisdom and utility of FSAs."

Additional information on the FSA program for federal employees can be found at www.fsafeds.com.

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