IRS on My Mind…Q & A About Medical Flex Accounts

Since we’re in the midst of tax season, and the IRS is on our minds, this Q & A reminder might be beneficial to those of you who have a medical flex account. (Only the medical flex account offers the Benny card, which is used like a debit card.) 

Q: Why do I have to provide itemized receipts when I use my Benny card? 
A: Due to IRS requirements, some expenses require substantiation. Some examples are co-payments for a spouse’s plan, dental services and vision services such as eyeglasses. Substantiation isn’t required for Heartland AEA employees’ co-insurance since that plan information has already been submitted by Heartland AEA. But because a spouse’s co-payment could differ according to their plan, and 121 Benefits wouldn't have that plan information, substantiation is required. 

Also, if the card is used at a store where ineligible items could be purchased (e.g., hair care products at Target when you check out through the CVS Pharmacy), then substantiation will automatically be required. A full list of eligible and ineligible expenses can be found on the 121 Benefits website. 

Q: What should I do if the card can't be used at the provider's office or retailer? 
A: There may be providers or retailers that do not accept Visa, or there may be a store that is not authorized to do so. In this case, you must seek reimbursement for the expense through the manual claims process: by submitting a claim online via your personal account, by fax, mail or by using the 121 Benefits mobile app. 

Q: Do I need to save my receipts and documentation? 
A: You need to save your receipts or itemized documents for expenses that have been paid or reimbursed from your FSA, HRA or HSA. If you are audited by the IRS, you may need these documents. The IRS requires that all expenses are verified or substantiated, and if not, additional documentation is required to not only make sure the expenses are eligible but that they were incurred in the proper plan year. If a receipt or documentation is needed, you will receive notification from 121 Benefits. (These receipts are needed to document your debit card charges should you ever be audited by the IRS, even if the receipt is not required for reimbursement through 121 Benefits.) 

If you have any questions, contact Juliette Houseman, Benefits Specialist.