Last month we revisited the topic of why substantiation is required on many, but not all, FSA debit card transactions. When a participant swipes an FSA debit card, it triggers a series of emails from SBA telling them whether that swipe will need further documentation or not. Listed below is what your participants can expect to receive from SBA when they utilize their FSA debit card.
When a debit card swipe does not require documentation (typically only for prescriptions or office visit copays):
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- Our debit card program ([email protected]) sends out an email on the day the card was swiped to let the participant know the card was used, at what location and for how much. This email is intended to help the participant ensure that the swipe was legitimate as well as notify them that further documentation may be required to verify the eligibility of the expense. We must then wait for the merchant to upload the debit card swipe details and for that information to be uploaded to our software.
- If the expense was approved using the IIAS system and will be auto-substantiated, the participant will be notified by a second email that no further action is required on their part. Remember that auto-substantiation occurs when the merchant category code in the merchant’s credit/debit card machine matches the same code embedded in the debit card. Examples of IIAS expenses: merchant category code 5912 for prescriptions or 8099 for doctor office copays.
When a debit card swipe does require documentation:
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- Our debit card program ([email protected]) sends out an email on the day the card was swiped to let the participant know the card was used, at what location and for how much. This email is intended to help the participant ensure that the swipe was legitimate as well as notify them that further documentation may be required to verify the eligibility of the expense. We must then wait for the merchant to upload the debit card swipe details and for that information to be uploaded to our software.
- If it is determined that the swipe is not auto-substantiated, the participant’s next email tells them they need to provide documentation to substantiate the swipe and how to do so (fax, email, mail, or online/mobile app entry).
If the participant submits adequate documentation to substantiate their swipe, the matter is closed and they receive no more emails.
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- If, however, after 7 days we have not received the requested documentation, a third email is sent. It acts as a reminder to the participant that they have not provided documentation for the swipe yet and identifies a deadline to submit the substantiation (16 days after the swipe is uploaded to our software).
- A fourth email is sent 20 days after the swipe is uploaded to our software. It informs the participant that their debit card is deactivated because they have not provided the required documentation.
- Once a card has been deactivated, we email the participant directly at least twice more over the span of two months in an attempt to collect the documentation. If we do not have any response to our emails, or do not receive the required documentation, we notify the employer to get involved. We ask the employer to collect the documentation from the participant or to have the participant repay the employer for the ineligible swipe.
While the number of emails to collect documentation for un-auto-substantiated debit card swipes may seem excessive, it is necessary to protect the employer and all the other plan participants from losing their tax savings for the year if it is determined, during an audit, that one participant failed to document their swipe. That is a steep price to pay.
So, we’ll play the role of dogged document collector, but when we come to you, the employer, for assistance, know that we’ve exhausted our attempts and we’re bringing in the big guns for the greater good.
Here are samples of the emails your participants will receive when swipes are auto-substantiated and are not auto-substantiated.