Making the Most of your Flex Debit Card

08/18/2016

Making the Most of your Flex Debit Card

Many employers offer the convenience of a flex debit card as part of their pre-tax spending accounts. With the flex debit card comes the convenience of being able to pay for out of pocket medical expenses at the point of sale without having to wait for a reimbursement by check or direct deposit.  Along with the c ash flow advantage also comes the requirement to substantiate and make sure that all funds are being used for eligible expenses as outlined by the IRS.

There are several instances when a flex debit card is used and follow up documentation is not required. These are:

Co-pay Match – if the amount matches a co-pay with the employer’s medical, dental, prescription or vision plan, the transaction can be automatically approved and itemized receipts do not need to be submitted for follow up.

IIAS Vendor – when the card is used at an Inventory Information Approval System (IIAS) vendor, the eligibility of the expense is determined when the card is used to pay for the item. Eligible expenses will be approved and ineligible expenses will be declined.

Recurring Expense – when the card is charged at the same provider for the same exact amount as a previously approved expense, a follow up receipt should not be needed.   The expense can be matched to the previously approved claim.

Any other expense will require appropriate documentation to confirm the expense is eligible for the plan. Participants who use their flex debit cards to only pay for prescriptions and co-pays may rarely be requested to submit follow-up documentation for their expenses.  Dental, vision, as well as medical deductible and coinsurance expenses are the most frequent sources of receipt requests.

Employers thinking about offering a flex debit card will want to make sure and educate employees about the use of the flex debit card and the requirements that come along with the card.

For more information about flex debit cards, please visit our website at www.myCafeteriaPlan.com.

 

 

 

BusinessPlans, Inc. – myCafeteriaPlan does not intend to provide legal or tax advice and information contained in this article should not be interpreted as such. Regulations governing pretax plans are often open to interpretation and should be reviewed with your legal or tax advisor before making any decisions regarding your plan.

Posted 8/18/2016