Flexible Benefit Resources FAQ

Healthcare debit cards cannot be used to purchase OTC drugs and medicines. If a healthcare debit card is used to pay for these items, the transaction will be denied at the point of sale. In this case, you will need to pay for the expense out-of-pocket and submit a claim, along with an NMN or a prescription, to be reimbursed.

Some services or drugs may have dual purpose. For example, a procedure may generally be deemed cosmetic in nature but may also be used to treat a medical condition. In order to show that such a treatment is medically necessary, the IRS requires you submit a note from your provider, or a Medical Determination Form explaining your diagnosis and the recommendation for treatment.

For a list of services and OTC drugs requiring a Medical Determination Form, see the eligible expenses list. If your expense requires a letter for reimbursement, download the Medical Determination Form, have your provider complete the form, and submit it with your claim.

A note from your provider listing the diagnosis of the medical condition and the treatment recommendation, called a Medical Determination Form must be submitted with your claim. Over-the-counter drugs also require a Note of Medical Necessity (NMN) from your provider.

For a more detailed list refer to Internal Revenue Code Section 213(d) on irs.gov.

Nonqualified distributions will be taxed as part of gross income and will incur a 20% penalty. After age 65, the 20% penalty is dropped, though the distribution is still treated as taxable income.

The 2021 maximum annual contribution is $3,600 for single coverage and $7,200 for family coverage. In 2022, those maximum annual contributions will increase to $3,650 for single and $7,300 for family.

In 2019, the maximum annual contributions are $3,500 for single coverage and $7,000 for family coverage.

If HSA owners are not eligible for this entire testing period, they must include in their gross income the contributions made for the months when they were not otherwise qualified. This amount will also be subject to a 10% penalty. The tax and penalty do not apply if the HSA owner is no longer HSA-eligible because of death or disability.

The 2019 maximum statutory contribution limit is $7,000 for family coverage. Whether each spouse opens an individual account or one spouse opens an account, the collective total must not exceed the family maximum.

• Take prescriptions, vision products and other health care purchases to the register at checkout to let the clerk ring them up. 
• Present your card or swipe it for payment.
• If the card swipe transaction is approved (e.g., there are sufficient funds in the account and at least some of the products are FSA-eligible), the amount of the FSA-eligible purchases will be deducted from your account balance. The clerk will then ask for another form of payment for the non-FSA-eligible items.
• If the card swipe transaction is declined, the clerk will ask for another form of payment for the total amount of the purchase. (File a claim for reimbursement for these expenses).
• The receipt will identify the FSA-eligible items and may also show a subtotal of the FSA-eligible purchases.
  In most cases, you will not receive requests for receipts for FSA-eligible purchases made in participating discount stores or supermarkets.

Keep in mind, the use of a PIN is not required to access your funds via the Benefits Access Card. You can continue to use your Benefits Access Card as you always have by simply swiping your card and providing a signature.

We want to help you understand and/or reduce these letters, so here are a few things you should know.

How to AVOID receiving a letter:

• If you have a deductible plan with co-insurance, don’t use your debit card to pay the provider at the point of care. It is not necessary to pay the provider until you have received an Explanation of Benefits (EOB) and/or the bill with the patient balance-due after it had been submitted to your insurance. You can then write your card number on the invoice and return for payment. However, if a doctor or dentist insists that you pay at the point of service, use another form of payment and then submit a manual claim.
• Only use your debit card for dependents covered under your health plan.
• Only use your debit card at pharmacies that can separate eligible items from non-eligible items. To find out which merchants are participating, visit the web site or call the number on the back of the Card.

You WON’T receive a letter:

• If you have a benefit plan with co-payments.
• When prepaid card transactions are verified electronically.

If you are asked to provide a receipt, it must include: merchant or provider name, service received or item purchased, date of service, and amount of the expense. Cancelled checks, handwritten receipts, your debit card transaction receipts or previous balance receipts cannot be used to verify an expense. If you don’t have the receipt, you can contact the provider who can usually supply the receipt from their files.