Avoid frustration by understanding IRS substantiation rules and how to easily follow them!

 

Who decides the rules? 

The IRS requires that FSA funds are only used on eligible expenses and that there is documentation to support that. It is Surency’s job as an FSA administrator to make sure you and your employer are compliant with the IRS rules.  

 

What are the rules? 

The IRS requires that FSA participants submit documentation to prove any purchase using FSA funds is an eligible expense.  

The documentation, usually an itemized receipt or insurance explanation of benefit (EOB), must contain the following details: 

• Date of service or purchase 

• Description of service or item purchased 

• Dollar amount 

• Provider or store name 

If your documentation does not have these details, you will be asked to re-submit. For example, treatment estimates, non-itemized receipts and canceled checks do not meet requirements. 

 

We make it easy to follow the rules! 

When using your Surency Benefits Card, eligible expenses that are purchased at stores that use an Inventory Information Approval System (IIAS) will be automatically approved, meaning no further documentation is needed to prove you purchased an eligible expense. To easily find a store that has an IIAS, click here. Most pharmacies, grocery stores and supermarkets have an IIAS. 

When more documentation is needed after a purchase using your Surency Benefits Card, it’s easy to take a picture and upload your receipt through the Surency mobile app or online member account. Always keep your receipts, even when using your Surency Benefits Card, so you can upload them later in case you are at a location that does not have an IIAS. 

If you didn’t use your Surency Benefits Card to purchase an eligible expense, you can easily submit a claim for your out-of-pocket expense through the mobile app or member account. When submitting your claim, simply take a picture of your receipt to attach with your claim details. If you have an insurance EOB, you can use the EOB smart scan feature on the mobile app. This feature will scan your EOB and auto-fill you claim expense details for you, making the process even easier! 

 

How will I know if I need to submit a receipt? 

You will receive a notification, depending on your notification preferences, you may receive an email, text and mobile app notification letting you know that you need to submit documentation for your FSA purchase. The Surency app is the easiest way to attach documentation to a claim, you will see the request for documentation in the Tasks section of your app homepage. Learn more about submitting receipts here.  

 

Quick tips: 

• Keep your receipts! The IRS requires proof that your purchase is an eligible expense. If your claim does not auto-substantiate, you will need to submit your receipt to Surency. 

• Download the Surency mobile app. The Surency mobile app is the easiest way to submit documentation and claims by simply taking a picture of your receipt while using the app. 

• Make sure your documentation has all the information required by the IRS. If your documentation doesn’t meet IRS requirements, you will be asked to re-submit documentation that does meet the requirements. Avoid frustration by knowing what your receipt must include! 

 

 

The information in this blog post is for educational purposes only. It is not legal, tax or investment advice. For legal, tax or investment advice, you should consult your own legal counsel, tax and investment advisers.