Substantiation is the verification process that the IRS requires to ensure you’re using your reimbursement benefit (e.g., FSA, HRA) appropriately. It usually entails submitting receipts for the paid item, uploading an Explanation of Benefits (EOB) that you receive from your insurance company, or a combination of the two.
Explanation of Benefits
An Explanation of Benefits (EOB) is a statement from your health, dental, or vision insurance plan. It describes the services received, the costs the plan will cover and the amount you’re responsible for. Your provider creates an EOB when they submit a claim for the services you received. An EOB is not a bill, but is an ideal document for substantiating FSA and HRA claims.
NOTE: Make sure your provider’s bill matches the EOB before you pay.
This might seem like a lot to keep track of, but there’s good news. Some eligible items are automatically substantiated through your provider. This happens at certain merchants who have their inventory control system set up to work with IRS regulations. This means that for you the customer, the qualified purchase is automatically approved. This system is known as an Inventory Information Approval System (IIAS).
For example, if you use your FSA to cover over-the-counter medication for pain relief at a pharmacy, you may not have to substantiate your purchase.
Using Your Lively Benefit Access Card
Stores that are “IIAS-certified” have modified their inventory management systems to automatically identify FSA- and HRA-eligible products. Therefore, if you use your Lively Benefit Access Debit Card at any of these stores, you won’t have to substantiate your purchase because your administrator knows it was for an eligible expense.
At these stores, 90% of their merchandise is FSA- or HRA-eligible. When making a purchase with your Lively Benefit Access Debit Card at 90% stores, you will need to provide substantiation. Uploading a receipt and sometimes an Explanation of Benefits (EOB) will help to verify that the purchase is eligible.
Non-certified and local merchants
When making qualified purchases at non-IIAS certified merchants, you will need to pay out-of-pocket. You can then submit your receipts for reimbursement from your administrator.
Health care providers
Generally speaking, you can use your debit card at your health care provider's office to help pay for your visit. You’ll need to upload an Explanation of Benefits (EOB) and receipt so the expense can be substantiated.
If you make a purchase at a non-qualified merchant, you will have to pay for the expense out-of-pocket and submit a claim for reimbursement.
Examples by Merchant Type
You can use the chart below to get familiar with different types of merchants and the substantiation requirements for your Lively General Purpose FSA or Lively Standard HRA. For other types of accounts, consult Lively’s "What's Eligible" tool to see what eligible expenses are covered.
Not every franchise of these retailers is IIAS-certified. If not, you’ll need to pay out-of-pocket and request reimbursement. Want to look up a merchant to see their status? Use this site to search for both IIAS-certified and 90% merchants in your area.Updated: