Issues re use of FSA debit cards

[Guest Amanda Davis]

We've been receiving some calls regarding FSA Debit Cards. Some issues that immediately come to mind are:

1. How to ensure that the service is for a covered dependent?

2. How to ensure that the entire charge is for eligible products/services?

3. The liability of the Company should someone obtain services/products that were not eligible?

Does anyone have any experience with these?

Thanks!

[Guest lschaab]

We have evaluated the 'card' and have the same concerns you do, amongst a long list of others. The card is a wonderful concept, especially for plan participants since the expense is paid for immediately from their account. In order to ensure compliance with the who, what, where, when and how much requirements participants must understand that the substantiation requirement still exists. This means that while they have the convenience of 'paying' for their expense directly from their account, they still have a responsibility to follow up by submitting receipts to a claims administrator for review. You now have to establish the timeframe for submitting receipts (possibly with an 'or else' clause) and a procedure for 'fixing' bad claims. YOu don't want to give the plan (or the benefits of the card) bad press, the reality is you have to follow the rules.

So the answer to your question is that you have to create a 'plan' as to how to avoid the pitfalls of the card (as pointed out in your inquiry) and develop an action plan. Education and clear procedures are extremely important, especially if your intention is to comply with the regulations, as some TPA's may attempt to compromise.

Good luck.