Have you decided to sign up for a flexible spending account (FSA) and received an FSA card? Great news! You will be able to set aside tax-free money each month to cover a huge selection of eligible medical products and services. In most cases, FSA account holders will receive an FSA card to make purchases, but it can't be used everywhere. Let's explore the most important points about the regular use of an FSA card.
Who accepts FSA cards?
FSA cards are essentially the same as debit cards, but used to cover medical expenses with FSA funds. In some cases, FSA holders who wish to access their funds are required to incur an out-of-pocket expense, and then submit receipts to their benefits administrator. Employees will get reimbursed once the paperwork is submitted for eligible expenses.
FSA cards make the reimbursement process much easier by automatically withdrawing funds from the debit card. However, if an FSA holder opts to make a purchase with his/her card for a product or service that is a non-healthcare merchant, this merchant must support an inventory information approval system (IIAS). An IIAS identifies healthcare eligible items based on the product's UPC code. This combines inventory management and point-of-sale systems that confirm the eligibility of items purchased with an FSA card, which accesses eligibility flags in the merchant's inventory database. In addition, this will generate a payment transaction that contains the required IIAS information. It will also allow merchants to respond to IRS audits, if they occur.
You can't use it in every store
It might sound obvious, but it's important to note that you can't use your FSA card at just "any" store, unless the purchases are eligible for FSA reimbursement. In order to be able to use your FSA card at a specific location, it must be one that accepts FSA cards and sells qualified eligible products, such as a pharmacy or grocery store. You can also use it at approved locations which offer medical services, such as a doctor’s office or dentist.
Make sure the merchant accepts FSA cards
For the most part, your FSA card should work where it makes sense: at locations like pharmacies, vision centers, doctor and dentist offices, and so on. But if you try to use your card at a restaurant or bike shop, even if that bike shop happens to sell FSA eligible bandages, chances are your card won't work.
If you have questions about whether or not a specific merchant will allow your FSA card, you can contact your FSA administrator to find out. The easiest way to ensure that your items or services are eligible is by checking out our comprehensive Eligibility List, and by shopping at a store that exclusively sells FSA eligible items. It takes the guesswork out of shopping and decreases the chances that your FSA card will be declined.
Do I still need to keep my receipts?
FSA cards automatically deduct the amounts of your qualified purchases. But, FSAs require itemized deductions. The IRS requires that all FSA reimbursements be substantiated with receipts or other forms of documentation. Benefits providers may request a copy of itemized deductions to validate that an expense was eligible for reimbursement through a FSA.
Now that you know how your FSA card works, use it at the store designed to make it easy to spend FSA funds: FSAstore.com! We have the web's largest selection of FSA eligible items. We accept ALL FSA cards, as well as major credit cards.