Every FSA expense must be approved (or substantiated) by your plan sponsor. This process ensures that all claims are eligible under both IRS guidelines and your specific FSA plan rules.
Because FSA funds are tax-advantaged, employers are required to verify that funds are used for qualified medical expenses. If your documentation does not clearly show that the expense is eligible, Lively may request additional proof before approving your claim. This protects both you and your employer in the event of an IRS audit.
To help your claim process smoothly and without delay, be sure to follow the “Rule of 5” when submitting documentation:
-
Patient or dependent name
-
Provider or merchant name
-
Date of service
-
Type of service or product
-
Expense amount
Acceptable documentation typically includes an itemized receipt or an Explanation of Benefits (EOB) from your insurance provider. Credit card or bank statements alone are not sufficient because they do not provide enough detail about the expense.
Updated: