FSA client payments: refunding or getting them itemized receipts

crystalp 7 years ago in User Group Help updated by Laura Graff 7 years ago 3

Does anyone know the legalities or tax issues related to FSA $. We have a client who was paying co pays with his FSA but after a certain amount of visits, his insurance started paying in full but he still was paying some co pays. Now his FSA administrator is asking for an itemized receipt but we can't really give him one because we did not allocate the payment. Can we refund the client and he then has to send the $ back to FSA account? Suggestions?

From past experiences, the member would need to refund the monies to the FSA Administrator.

I would go ahead and refund the member and let them deal with their FSA Administrator. 

This happened to me personally.  The FSA will require that he reimburse the FSA account, or that he submit additional receipts to offset the amount paid. In my case, I received a message on the FSA online account mailbox, and they also sent a letter to my employer.  This can go on for the entire year until the amounted paid by the FSA is accounted for.  If it is not taken care of by the end of the year, the FSA administrator will start deducting it from future paychecks in addition to any new deductions for the new year (if FSA is provided through an employer)

In my case, I had a large hospital bill that I turned in and claimed the entire amount and this offset the balance owed (the amount charged that needed to be reimbursed.) 

Tell him he should call and find out the exact amount and then can turn in receipts (if he has any) to cover the amount paid by the FSA OR he can write a check out to the FSA and mail it in.  My employer did not send it in for me.  I had to do this on my own.

More details of my issue-----I paid the chiropractor up front in order to get a cash discount, not realizing I had already met my deductible.  Almost all my visits were covered by insurance, so the itemized receipts all showed a very low balance that did not add up to the total amount charged on my FSA card. It sounds like almost the exact same type situation.

Also---It does not matter who the receipts are from as long as they are FSA approved.  My overpayment was for the chiropractor, and I turned in a hospital receipt to cover the offset.