The biggest concern (and frustration) of employees is getting an FSA expense declined. This is often caused by misunderstanding FSA substantiation requirements which can be easily avoided.
Auto-Substantiation for Employees
Most qualified expenses can be auto-substantiated when they are considered pre-approved by the provider. This is often based on merchant or expense categories (like copays or recurring medical expenses).
Using an FSA debit card for qualified purchases is the easiest way to take advantage of this process. Most FSA cards will only work at approved locations. In these cases, no further documentation will be required, however in some cases further documentation may be requested so hold onto those receipts, at least for a little while.
Manual Substantiation Tips for Employees
Some expenses will require manual substantiation. Here are some tips to help you get reimbursed smoothly.
- Review Eligibility Before Purchase - Review the IRS list of eligible expenses here or contact your FSA provider customer service team.
- Hang on to Your Receipt - Make sure you get an itemized receipt for any service or procedure you might submit for reimbursement. If your provider allows, upload it via your FSA mobile app so you don’t lose track of it, or hang on to it until after your reimbursement has been processed
- Submit the Proper Documentation - This includes: the date the expense (incurred not paid), the name of service provider, description and the cost of service. Some expenses require a Letter of Medical Necessity (LMN). Check with your provider for what is required.
Taking time to get prepared and understand FSA substantiation will limit your frustration and ensure you can pay for, and get reimbursed for, qualified medical expenses with your FSA funds.