Is a receipt required for FSA reimbursements, or is a bill okay?

[Guest Christie Banks]

Is it a requirement for employees to have to submit an actual receipt of medical expenses to receive a reimbursement under a FSA, or can they submit a bill they received? In other words, do they have to have actually paid the bill, or can they receive the reimbursement before paying the bill?

[Guest Steve C.]

A health FSA may reimburse a medical expense only if the participant provides a written statement from an independent third party stating that the medical expense has been incurred and the amount of such expense and the participant provides a written statement that the medical expense has not been reimbursed or is not reimbursable under any other health plan coverage. Thus, an actual receipt for payment is not required, only a statement that the expense has been incurred.

[KIP KRAUS]

While I will agree with Steve. However, there are circumstances that could require the bill to be submitted to the medical plan provided there is a medical plan. If, for example the medical plan has front-end deductibles the claim should be processed by the medical plan for refusal and the FSA can then pay from the EOB. In addition, unless the FSA administrator knows that the charges are not reimbursable under the medical plan then an EOB denying the charges should be submitted to the FSA plan. I could see a situation where a person might double dip by submitting a bill only because they could get reimbursement from the FSA and turn around and submit the same bill to the medical plan. Maybe unlikely, but probable.

Having said all of this, if one feels comfortable with relying on third party confirmation and the participant’s statement then go for it.

[Guest stan]

I agree with the above responses. Another thing to consider is whether the FSA plan itself has adopted more stringent substantiation requirements than those in the regs. For example, I have encountered a health care reimbursement account plan that will not accept a provider's statement or bill, the plan also requires "evidence of payment," which the plan defines as a copy (both sides) of a processed personal check or a receipt from the provider indicating that payment has been made.