IRS rules require that all flexible spending account (FSA) and health reimbursement arrangement (HRA) expenses be substantiated to confirm eligibility. When you use your benefits card, most transactions are approved automatically. However, sometimes a purchase can't be verified right away. When that happens, you'll be asked to provide documentation to “substantiate” your purchase.
Required Documentation
You'll need an itemized receipt that includes the following:
Provider or store name
Type of service or item purchased
Date of service or purchase
Cost
For medical claims, an explanation of benefits (EOB) from your health insurer works great. For prescriptions, the receipt included with your medication typically has everything needed. A standard credit card receipt, by itself, typically does not provide enough information to substantiate an eligible expense.
Reminder
Always save receipts and itemized records for any expense paid from a pre-tax account. You may need them if you’re audited by the IRS.
When You May Need to Submit Documentation
Where you shop matters more than what you buy. Here's a general guide:
Retailers that use an Inventory Information Approval System (IIAS) can automatically identify eligible items at checkout, so a receipt is often not required at the time of purchase. However, you should still save your receipt in case documentation is requested later.
There are providers or stores that sell a mix of eligible and ineligible items. Since the system can't always tell what you purchased, you should keep those receipts.
Dental and vision providers often offer both covered and cosmetic services. You should keep those receipts as well.
Responding to a Request for Documentation
You can submit documentation through the Health Wallet web portal or mobile app. If you fail to submit documentation when requested, your card may be suspended and the unverified amount could be added to your taxable income at year-end.
If your card is suspended, it can be reinstated by submitting the required documentation, providing documentation for an eligible expense you paid out-of-pocket (an "offset"), or repaying the unverified amount.