To stay compliant with IRS rules, your employer and flex benefits administrator are responsible for verifying that any money you spend from your FSA is used only for eligible healthcare expenses. This helps protect your tax savings and ensures the account is used as intended. Since FSA funds are tax-free, the IRS requires that every purchase be for a qualified healthcare expense. If you use your FSA debit card and the system can’t automatically confirm that the expense is eligible, your flex benefits administrator will reach out and ask for documentation. This process is called 'substantiation' and helps keep your account in compliance. Please respond timely to the flex benefits administrator request by providing an insurance EOB or other detailed receipt. Otherwise, your debit card will be suspended, and you will have to submit paper claims for all future reimbursements. FSA or L-FSA funds spent without proper substantiation can be withheld from future paychecks of active state employees. Central State employees (active or terminated) that owe $25 and less will have the amount owed added to their W-2s. Central State employees (active or terminated) that are in bankruptcy will have the amount owed added to their W-2s. Active Central State employees will have the amount owed deducted from their paychecks unless one of the above applies.
Why am I being asked to provide evidence of a claim or an explanation of benefits from my insurance because I used my FSA or L-FSA debit card?
