Where Can FSA Monies Be Spent?
Why Do I Have To Submit Receipts When Using My Flex Debit Card?
What is the Inventory Information Approval System (IIAS)?
What Does The IIAS Mean To Me The Participant?
What Type Of Receipt Is Considered Eligible Documentation?
How Do I Submit My Debit Card Receipts/Manual Claims?
MOST FREQUENT FSA DEBIT CARD VALID DECLINE REASONS
What is a Flexible Spending Account (FSA)?
FSA is a “Pre-Tax” program where monies are taken from a participant’s paycheck “Pre-Tax” throughout the year each pay period. Because you are not paying Income Tax, the IRS has regulations regarding where & what the monies can be spent on. Here’s a partial list FSA Quick Reference Guide of Eligible Expenses. A complete guide can be found at www.irs.gov by searching, Publication 502.
What is a Heath Reimbursement Account (HRA)?
A HRA is an Employer sponsored program that is set-up to cover medical deductible/coinsurance expenses & in some cases medical expenses that fall under Section 213D of the IRS Code.
They can be spent on Non-Reimbursed Medical Items such as, Dr. Co-pays, Medical Deductible/Coinsurance, Prescriptions/Over-the-Counter Products with a Dr.’s Prescription, Dental/Vision Services, Orthodontia, etc. that are incurred within the FSA plan year. Monies cannot be used for last year’s incurred claims expenses that were incurred outside of the current FSA plan year. Dependent Day Care Expenses can also be run via a FSA for Children who are 13 years old or younger or on an Adult Dependent that is claimed on your income taxes.
It is a REQUIREMENT under the IRS regulations. It is our job as a Third Party Administrator to verify that your Debit Card Transactions are eligible under the IRS regulations. If there is ever an Audit you will be thankful that your receipts are on file (they can go back as far as seven 7 years). You are encouraged to keep ALL your receipts on file, as well. Just in case! Should it ever be found, that you are out of compliance, it is an assessment of penalties & back income tax.
IRS regulation requires pharmacies to impliment an IIAS compliant Point of Sale (POS) system. To comply with these regulations, every pharmacy in the United States must implement a POS system that complies with these new requirements or discontinue the acceptance of FSA Debit Cards. For a list of participating IIAS merchant pharmacies go to www.sigis.com.
When using a compliant pharmacy for Prescriptions & Over-the-Counter products; you will no longer have to submit receipt(s). Verification of your transaction is done at the Point of Sales. Not having to turn in receipts ONLY applies to the IIAS. All other FSA Debit Card Transactions still require receipt submission under the IRS regulations.
An “Itemized” Billing Statement from a Provider that shows: the Date Of Service, The Provider’s Name/Address, Name of the Patient, Services Performed & the Amount Billed. An Explanation of Benefit (EOB) is also an acceptable form of documentation. Debit Card Transaction Receipts, Balance Forward Receipts, etc. ARE NOT acceptable forms of documentation under the IRS regulations.
Your FSA Debit Card or Manual (items/services you paid for without your FSA Debit Card) can be either mailed or faxed to IntegraFlex using a Flex/HRA Claim Form. The form is in a PDF format and can be filled out on your computer. Once complete, print, sign/date & mail or fax a copy to IntegraFlex. Our contact information is listed at the bottom of the form. You may also obtain this form from your company’s HR Department. Do not send/fax your receipts without completing the Flex/HRA Claim Form. Your claim will either be DENIED or NOT PROCESSED. This form greatly assists us in knowing how to process your claim/receipt submission.
1. The card has not been activated or has been suspended.
2. The card has no funds remaining, or the card has insufficient funds and the merchant does not support partial authorization.
3. The cardholder is attempting to purchase only non-healthcare eligible items with a card that has only an FSA and/or HRA purse.
4. The participant’s plan only reimburses the prescription drug amount and:
- the merchant does not send the Rx amount in the auth message, or
- the plan requires a match to claim(s) from a pharmacy benefit manager (PBM - the cardholder’s prescription drug plan) and the transaction failed to match, or
- the merchant sends the Rx amount but does not support partial auth and there non-Rx items being purchased
5. The participant’s card has not been loaded with funds for the new plan year because of delays by the employer or TPA in getting the enrollment file to the issuer processor.
6. The merchant sent an expiration date that does not match the date in the issurer processor’s system. This can happen when there is an error key entering the expiration date.
7. The merchant manually keys in a card number that does not match a valid card on file with the issuer.
8. The cardholder was issued a new card, either because his/her employer changed TPAs or she/he changed employers, but is continuing to use the old card that has been closed.
Declines for reasons other than #3 or #4 above would have happened last year before the implementation of IIAS. They have no relationship to IIAS and the implementation of IIAS cannot and was not envisioned to prevent them.
Receipts Are Needed By The TPA For Substantiation Of FSA Debit Card Transactions – The Debit Card vendor allows for 45 Days before “Temporarily Inactivating” the card. If a receipt(s) is/are not turned in within this allotted time frame, under IRS regulations the card is Temporarily Inactivated until supporting documentation is submitted.
Having the participant’s email address on file – will alert them by sending an email notice(s) reminding them to submit receipt(s), if one is needed. The first email goes out right after the FSA Debit Card Transaction has occurred. There will be two others, if the receipt is not turned in within 15 days of the first email reminder notice, a second email reminder notice will be sent. And a third, 15 days after the second email reminder notice, if receipt still has not been received.
We also mail out Receipt Notification Letters via US Mail to those participant’s who do not utilize email. We PREFER email because it is instantaneous and it’s better for the environment. Please help us to be more GREEN by providing us with an email address to where we can send receipt notification letters. It also cuts down on mailing costs helping to keep administrative fees lower for the employer group.