Flexible Spending Account Reimbursements Simplified

January 9, 2007

Thanks to changes made by the Internal Revenue Service, many of us are able to make claims against our 2006 Flexible Spending Account balance for health care expenses incurred up through March 15, 2007. If only we could find a way to simplify the process.

Receipt Overload
With a new baby the number of receipts for co-pays, prescriptions, and over the counter medicines multiplies pretty quickly. If your FSA account administrator is anything like mine, the process of submitting these receipts is quite a hassle.

Cutting Through the Red Tape
Recently I had 18 receipts to submit for reimbursement but the form only had room for 5 claims. I called up the administrator and asked if there was any way I could submit all the receipts at once without having to fill out and mail in 4 different forms.

The first answer was no, please submit 4 different forms. Irritated by what a waste of time that was I pressed harder. Finally, after arguing my case the representative acknowledged that I could just put all the receipts in one spreadsheet that contained the same fields as the paper form and mail them all in together.

Electronic Records
One current trend in health care information is to digitize health records. I figured; why not follow the trend with our family’s FSA records? I like the spreadsheet approach because it saves time filling out and mailing in multiple forms. Entering the information is simplified, just cut and paste a previous entry and change the appropriate details instead of filling out forms for each one.

In addition, the spreadsheet keeps a running tally so I know how much I should have been reimbursed for the year and it makes it easy to search for a specific claim. Many FSA administrators offer web access to your account. Once a claim has been submitted and/or paid it will show up online. You can double check your spreadsheet against their records to make sure you were reimbursed appropriately.

Flexible Spending Account Debit Card
When my plan administrator first offered a debit card that we could use to pay for health care items I signed up right away thinking it would simplify the process. However, many of the items that I paid for with the card were flagged by the administrator as requiring substantiation. For each claim that was flagged I had to fill out and mail in a separate substantiation form.

After several cases of this I decided to see what would happen if I didn’t mail in the form. Several weeks later, my FSA debit card was locked. For me, it was more of a hassle to keep up and fight with separate substantiations for claims than it was worth. I decided to abandon the debit card and stick with the spreadsheet method described earlier. This approach has worked out quite nicely.

Use It Or Lose It
Whichever system you use, if you still have money left over from your 2006 FSA contributions make sure you use it by March 15, 2007 or that money will go to your employer instead of in your pocket!


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Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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5 Responses to Flexible Spending Account Reimbursements Simplified

  • Ben

    Good point Sun, the employer doesn’t have to offer the extension. Unfortunately, if a person’s company doesn’t make the extension available then any funds not used for 2006 are already forfeit.

    The first year I contributed to a FSA I ended up not using and losing about $20. It wasn’t a ton of money but it sucked losing my hard earned income just because I didn’t follow through. I won’t let that happen again!

  • Sun

    Actually, the two and half months extension isn’t mandate but an option for employer (IRS Notice 2005-42), so one does have to check with his/her employer to make sure this option is offered.


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