gift certificate as payment

[Guest mmclees]

I have a claim from an employee requesting reimbursement for an eligible medical expense however, the employee used gift certificates to purchase the over-the-counter medical item. The total cost of the expense is the same amount as the gift certificates. My question: are gift certificates treated like cash and can you be reimbursed for using them? Did the employee really have any out-of-pocket expense? Your help is always appreciated. thanks!

[Guest gdburns]

If the employee had used a Money Order or a Cashier's Check, you would have reimbursed them wouldn't you?

The Money Order or the Cashier's Check would have had to be purchased with cash and so would the Gift Certificate, so to me there is no difference and does not matter what they used.

The Treas Regs uses the term incurred to qualify a medical expense and specifically says that it does not have to be paid. What does your Plan Document define a medical expense as being?

[J2D2]

I agree that the employee should be reimbursed. I don't see the practical difference between paying the expense with the crisp $20 bills packed in a birthday card or using a gift certificate. The employee paid a qualifying medical expense and is entitled to reimbursement.

[Mary C]

Many local churches & schools sells gift certificates from large national grocery/drug stores (for example Kroger's) as a fund raiser (they get to keep a percentage of all sold). If a participant buys the certificates and use them to for the copay for prescriptions why wouldn't the script be reimburseable from an FSA plan?

[Erik Read]

I think the question is also the fact that the reimburesment request is for the whole amount of the GC, and they are asking if the OTC med was less than the total and the member recieved cash back from the GC, then they would be reimbursed for more than their out-of-pocket actual cost for the OTC med.... right?

I say you need more documentation before paying to be sure the cost of the item +tax if applicable is covered, but nothing more from the FSA. That would be like me taking a $20 MO in to pay for a $4 bottle of asprin, then requesting reimbursement for the entire MO.

[leevena]

I agree with the earlier comments, that the manner in which the payment was made is ok. I am a little confused about the issue surrounding the format in which the "expense" is being submitted. There should be an itemized receipt that would clearly show the cost of the item purchased. That amount is what should be reimbursed, not the amount of the gift certificate.

[Guest gdburns]

The OP stated that "The total cost of the expense is the same amount as the gift certificates."

This indicated to me that the actual receipt (or a copy) had been submitted as part of the claim documentation. Without a receipt the total cost etc could not have been known.

Since the total cost was the same as the amount, there would have been no cash back either.