Baby Rash Ointment and Cream: HSA Eligibility

Baby Rash Ointment and Cream: requires a prescription to be eligible with a Health Savings Account (HSA)

Baby rash ointment and cream is an over-the-counter (OTC) item eligible for reimbursement with a prescription with a flexible spending account (FSA), health savings account (HSA) or a health reimbursement arrangement (HRA). Baby rash ointment and cream reimbursement is not eligible with a limited care flexible spending account (LCFSA) or a dependent care flexible spending account (DCFSA).

What is baby rash ointment and cream?

Baby rash ointment and cream is designed to treat the symptoms of a common skin condition that affects newborns called seborrheic dermatitis, which causes red, scaly, waxy patches that afflict all portions of a baby's body. For instance, rashes that develop on a baby's scalp are known as cradle cap, while those that occur around the baby's bottom are commonly referred to as diaper rash and are treated by baby rash ointments and creams (National Eczema Society).

These products feature a wide variety of potential ingredients to meet the individual needs of a child's skin type, but the most common is zinc oxide, which repels moisture and promotes the healing process. Parents should pay attention to ingredient lists to search for zinc oxide and petroleum jelly as the most effective active ingredients, while being wary of fragrances and proteins that may spark an allergic reaction in some children.

What is diaper rash?

No matter how diligent new parents are with diaper changes and keeping their child clean, chances are that diaper rash will rear its ugly head at some point in during infancy. Diaper rash can arise from a number of sources, including excess moisture from diapers being on too long, irritation caused by rubbing or chafing, allergic reactions to diaper materials, as well as bacterial/yeast infection.

Susceptibility to diaper rash can come from a variety of sources, but the most common is sleeping/wearing a dirty diaper for an extended period of time and allowing moisture and bacterial buildup to manifest itself into an uncomfortable skin condition. Additionally, other factors like the child's age (between 9 and 12 months), digestive issues like diarrhea, and beginning to eat solid foods can all contribute to flare ups of diaper rash (Mayo Clinic).

Why do baby rash ointments and creams require a prescription?

As a result of the passage of the Patient Protection and Affordable Care Act (PPACA), as of January 1, 2011, OTC items containing an active medical ingredient require a prescription for reimbursement with an FSA, HSA or HRA. To reimburse the cost of OTC medicines and drugs under FSAs, HSAs and other consumer spending accounts, account holders must submit a prescription for each product.

However, not every OTC product falls under this distinction and thousands of products continue to remain eligible without a prescription including bandages, first aid supplies, most sunscreens, diagnostic products, products for infant care and so much more. For more information on a specific product, be sure to consult our Eligibility List.

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Specifically Not Covered

Baby rash ointment or cream without a prescription.

Legal Information / Regulations

Prescription Required. Information Letter (IL) 2009-0209; Notice 2010-59.