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I underwent a medically necessary treatment with my healthcare provider as soon as my insurance went into effect for the current period, and paid via an FSA card.

Shortly after, I was required to submit proof of my claim as they need to verify 100% of card transactions, so I gathered all the documentation and had the licensed practitioner complete a letter.

This took place early January 2016 (I'm still in the same FSA period) and I just stumbled upon these documents in a file folder. I never actually sent it to FSA.

Unfortunately, the practice closed over 9 months ago and the doctor moved to Europe. My concern now is that if FSA verifies claims but consistently gets no response from my ex-healthcare provider, they will make me responsible for payment of treatment.

In case it matters: I used all the funds on this one procedure, so I have no remaining balance.

  • Did they reimburse you (or did you pay for this via a FSA debit card), or are you still awaiting reimbursement? What is the status of the claim on wageworks.com? – Joe Sep 7 '16 at 15:25
  • I paid via an FSA debit card and used the entire available balance on this one transaction. – CMilian Sep 7 '16 at 19:31
  • Does WageWorks consider this cleared, or is it still listed as pending verification? – Joe Sep 7 '16 at 20:57
  • @Joe Once I track down my login, I will confirm. My timing is off because I sign up for FSA benefits at the same time my employer requires us to renew our insurance - which is end of August. Our coverage period for insurance begins October 1st. I thought the FSA benefits kicked in at the same time. I hadn't noticed the benefits kicked in 4 months later, until you pointed out that the math did not add up. Is it possible to have 2 concurrent FSA accounts? Because if my current FSA coverage is from 1/1/16 to 3/16/17, and the next coverage period begins January 2017, there would be an overlap. – CMilian Sep 7 '16 at 21:18
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It's not likely that an FSA vendor will accept your proof at this point. Do you know your plan's plan year (does the plan have a January 1 start date)? I'm assuming you're referencing the 2015 plan year considering you mention it's been nearly a year.

While this is not specific to Wageworks, there are a couple of options an employer can elect known as the grace period or the roll over. A grace period extends your ability to incur and file claims, but the extended filing date is typically March 31, considering a January 1 plan year. When the plan year has closed it's generally closed with a capital C in order to stay compliant with the IRS regulations.

The use it or lose it nature of an FSA stems from the fact that you have access to all of your annual allocation on the first day of the plan year. If you elect to contribute $200 per month, you can go have a $2,400 surgery on January first and pay for it completely with your FSA funds that you haven't even contributed yet. Then if in March you leave the company having only contributed $500 you don't owe the difference. BUT, if you don't use your funds they're gone.

As an aside, "medically necessary" doesn't really have any bearing on HSA and FSA expense eligibility. FSA and HSA accounts offer really great tax benefits to the people that use them, but that benefit comes with some strict regulation. While you can use your FSA funds for some things that your medical insurance generally excludes (like eye glasses and COBRA premiums) you may want to ensure that the procedure you've received is an eligible expense.

Here is IRS Publication 502 that outlines eligible expenses. And this is the eligible expenses list from Wageworks

Bottom line, I doubt you'll be able to collect on this claim. Unless your employer's plan year runs June to June and you're still in the plans grace period too much time has likely elapsed for the Vendor to accept claim paperwork (unless you have a strong advocate in HR who will make an extremely unusual and probably non-compliant exception for you).

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    Your first two paragraphs are not quite correct. If you use your FSA debit card to pay for the service, then there is typically a short window within which you have to provide proof. However, if you pay out of pocket and then want reimbursement (as it sounds like OP did), you generally have until the end of the plan year plus a submission grace period. (My old employer's plan year ended in March with a submission grace period through May, so I could pay for a service in March 2015 and wait until May 2016 to request reimbursement.) – dg99 Sep 7 '16 at 19:24
  • I used an FSA debit card and used all the funds in that one transaction, so I'm not worried about losing any money. I didn't indicate this earlier, but I have updated my question to reflect this piece of information. An email I received from them indicates that my "coverage dates" are from 1/1/16 to 3/15/17 and I must "claim it by" 4/15/17. Is it possible that my wages could be garnished in the amount of this claim? – CMilian Sep 7 '16 at 19:34
  • @CMilian if you've already used the funds what are you trying to accomplish? – quid Sep 7 '16 at 19:36
  • @quid I would like to re-enroll for FSA this upcoming year. Could this affect me in being able to do so? – CMilian Sep 7 '16 at 19:39
  • @dg99, I edited my answer to clarify. – quid Sep 7 '16 at 19:46

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