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Learn About The Process Of Debit Card Substantiation

The process of validating the purchases made with a debit card for flexible spending accounts (FSA) or health reimbursement arrangements (HRA) for an acceptable medical expense is known as debit card substantiation. 

According to IRS requirements, these purchases must be verified. To prove that a healthcare debit card was used to pay eligible expenses, receipts or documentation are usually required. You can visit to align with your compliance policies.

There are two ways to support claims, according to the IRS. The first is auto-substantiation. These charges can be made electronically by matching the copay amount or a fixed recurring claims, or by real time substantiation. They are then verified as eligible expenses using the IIAS system. 

The IIAS system, which is an inventory approval system, requires merchant point of sale systems to verify that eligible medical expenses are items purchased with a FSA card or HRA card. The transaction will be denied if it is not eligible for medical expenses.

The second is manual substantiation. If the purchase amount is less than the copay amount, or if the prescription is not IIAS compliant, all purchases must be confirmed with receipts and other supporting documentation.

All receipts and documentation must contain the name of the person who made the expense, the address of the service provider, the date, the description, and the amount.

This software reduces the burden on employees to complete additional paperwork and creates a seamless workflow behind the scenes. This reduces administrative costs and saves employees the time and effort of filing claims.