Have you decided to sign up for a flexible spending account (FSA)? Great news! You can set aside tax-free money each month to cover a huge selection of eligible medical products and services.
Most FSA account holders will receive an FSA card in the mail. When your card arrives, remember that while it makes health purchases convenient, it can't be used everywhere. Here’s what you have to know about usage.
Who accepts FSA cards?
FSA cards are essentially the same as debit cards, but they're used to cover qualified medical expenses with FSA funds. In some cases, FSA holders who wish to access their funds are required to pay out-of-pocket 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 because they automatically withdraw funds. No reimbursement needed! However, if an FSA holder makes a purchase with their card for a product or service that is not from a healthcare merchant, the merchant in question must support an inventory information approval system (IIAS). An IIAS identifies healthcare eligible items based on the product's UPC code.
This combines inventory and point-of-sale systems to confirm that the products being purchased with the FSA card are eligible, and if they're not, it will be flagged. It will also generate payment transactions with the IIAS information and help merchants respond to IRS audits if they happen.
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.
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