![]() ![]() Most providers are flagged for additional information because they offer not only eligible expenses, but ineligible FSA items as well, like cosmetic reconstruction. To make the substantiation process less of a headache know these guidelines:ĭental and vision will need substantiation. How to Reduce the Challenges of “Substantiation” You can check online to see if your item is an eligible product. You must have a doctor’s order to approve these items and submit the sales receipts for FSA/HRA approval. Examples would be dietary supplements and vitamins. Keep in mind that dual-purpose items that have both a medical purpose and a personal or cosmetic general purpose are not permitted to identify as an eligible item under IIAS. Health care providers cannot share the details of your treatment. Also in play is that Administrators are restricted from obtaining additional information about the service provided to you due to HIPAA privacy rules. That is why just a receipt of payment is not enough to corroborate with your FSA Administrator. The system does not share WHO received that service or WHAT type of service was provided. When you use your FSA Card, the information sent to the FSA Administrator is generally limited to the date of transaction, merchant name and amount of purchase. See more: FSA Eligible Expenses Cheat Sheet (PDF) What Purchase Information Gets Collected? You can check online if your merchant is supported by the IIAS. Those likely to qualify are locations where prescriptions are the primary business of the pharmacy. Thus, the IRS established the 90% Rule as an exception to the IIAS requirement. The IRS recognizes that most drug stores/pharmacies are highly specialized, selling primarily prescriptions/Rx and other qualified medical goods and services. We love the convenience of being able to use the funds in our FSA account with the swipe of a card, but this system and its preciseness is only as good as those merchants that use this system. At the point-of-sale the system has the ability to verify that the merchandise being purchased with an FSA/HRA card is an eligible medical expense, as defined by the IRS. The Inventory Information Approval System (IIAS) – a super computer that helps “substantiate” FSA-eligible purchases – has made this process both easier and harder. In exchange for allowing you to avoid paying taxes on your FSA funds, the IRS requires categorical confirmation. You know that you went to a provider that is clearly FSA eligible, so why the challenge? It’s All About the “Pre-Tax” BenefitĪs FSA management has become more sophisticated, the rules around being a “pre-tax” account have become more explicit for verifying eligibility. But then, a few weeks later you get a message from your FSA Administrator asking you to prove that the treatment you received was an eligible expense. You know you have money in your FSA account, and the transaction goes through at your provider without a hitch. ![]() Why Are My FSA Purchases Being Challenged?ĭuring your last visit to the doctor or dentist, you used your FSA card for the co-pay or services rendered.
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