Buying qualified medical services with your FSA and HSA differs from purchasing products, mostly by how reimbursement is handled. FSA/HSA approved products are all identified as eligible by their UPC barcode which makes purchasing FSA/HSA eligible products more certain.
Since services do not come in barcoded packaging, these transactions are subject to post-purchase audits even if your FSA/HSA card transacts at the point of sale. Read on below for everything you need to know when purchasing FSA/HSA services.
How do I tell which services are FSA and HSA approved?
The easiest way to determine which services are covered is to refer to the BuyFSA Eligibility List that outlines qualified medical expenses according to IRS guidelines. Many of these qualified service providers will allow you to swipe/tap your FSA/HSA debit card when it’s time to pay, but in some cases you may need to pay out of pocket with your own credit card for later reimbursement.
Whether you pay with your FSA/HSA debit card or personal credit card, you’ll want to make sure that the service is eligible for reimbursement to avoid holds on your account or denied claims down the road.
For a comprehensive guide to FSA/HSA product and services eligibility see: FSA Products & Services Eligibility List
What steps do I need to take to ensure my claim gets approved?
Prior to making any purchase, it’s highly recommended to check with your HR department or your FSA/HSA provider to ensure your purchase will be reimbursed and will not get held up if your transaction is eventually audited.
3 steps to buying FSA/HSA services:
- Step 1: you can refer to the BuyFSA services eligibility list to get an idea of which products are covered with your account.
- Step 2: If the is any uncertainty with the expense classification, check with your FSA/HSA provider to see if the specific expense you’d like to get reimbursed is covered
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Step 3: Confirm with the service provider that they have transacted FSA/HSA purchases before and can provide a receipt that includes:
- The full name of the service provider
- The date the service was rendered
- An itemized description of the provided services
Can I purchase FSA/HSA services with my FSA and HSA debit card?
Yes, you can use your FSA or HSA debit card to purchase eligible services, but not all service providers are set up to accept FSA and HSA cards. Typically, the service provider will need to have a merchant category code that is recognized by your FSA/HSA provider to transact successfully.
It’s important to note that even if your FSA/HSA card works initially, you are still subject to an audit post-purchase and will need to have saved documentation that substantiates your purchase for reimbursement.
There are many qualified service providers that do not accept these cards, but you can still get reimbursed for these expenses so long as you keep your receipts that have sufficient descriptions of the services rendered (see step 3 above).
Example of FSA/HSA qualified services:
- Acupuncture
- Doctor’s copays
- Eye Exams
- MRI
- Telemedicine
- OB/GYN Fees
- Allergy Testing
How do I get reimbursed for expenses paid for with my regular credit card?
If you use your regular credit card to purchase qualified medical services throughout the year, make sure to save your receipts as you can still file for reimbursement and oftentimes can do so even after your plan year expires with the FSA runout period (see more below).
How long do I have to file claims for FSA reimbursement?
You have at least your full plan year to file out of pocket claims for any expenses paid for within that year (as long as you save your receipts). Most FSA plans also permit an extended three months (90 days) to make these claims after the plan’s expiration date. This 3 month extension is referred to as an FSA runout period.
Typical FSA plan years extend 12 months and the most popular deadline is on December 31st. However, depending on your employer, you may have your plan year end at the end of any given month. Your employer makes the ultimate decision and is typically determined based on your employer’s fiscal year.
When do I need a letter of medical necessity to cover my FSA/HSA purchase?
While eligible services do not require a letter of medical necessity (or a doctor’s note) to qualify for FSA/HSA spend, there are some services that will be covered contingent on your individual medical needs. If your doctor writes you a special letter that indicates you have a specific medical need for an otherwise disqualified service, you can still get reimbursement for this expense.
It’s highly recommended to check with your FSA provider prior to making any purchases that you intend to get a letter of medical necessity for. There may be cases where your letter of medical necessity still does not result in reimbursement if your provider sees the expense as one that strays too far away from IRS guidelines around qualified medical expenses (see IRS document 213(d)).
While any ineligible service can be considered for reimbursement with a doctor’s letter, you can refer to the BuyFSA Eligibility List for a common list of expenses that are covered based on individual need.
Read more about letters of medical necessity here.
Examples of ineligible expenses that may be covered with a letter of medical necessity:
- Diet Programs
- Herbal Medications
- Birthing Classes
- Medicated Shampoo
- Orthopedic Shoes
- Reflexology