FSA Reimbursement: How to File Claims, Follow the Rules, and Avoid Common Mistakes

Key takeaways:

• Reimbursement allows you to apply your FSA funds to health expenses you previously paid for out of pocket.
• From services to everyday products, many health expenses qualify for reimbursement.
• Starting sooner rather than later is the best way to ensure you don't forfeit funds to your deadline.

Paperwork. It’s not something most people look forward to. But it gets a lot more interesting (and literally rewarding) when that paperwork puts some of your hard-earned money back into your pocket.

That’s what can happen with your flexible spending account (FSA). Even though FSA cards make it easy to buy eligible healthcare products tax-free, you’ve probably paid out of pocket for some things this year that qualify for reimbursement. Many everyday health products and services, like chiropractic appointments and allergy meds, are FSA eligible without most people realizing it. (In other words, your FSA might “owe you one.”)

But to collect this money, you need paperwork that matches your claims. It sounds complicated, but it isn’t once you know the steps. And because claims take time to gather, file, and process, it’s best not to put them off until your FSA deadline. Filing as you go keeps your money working for you and keeps the process stress-free.

(Of course, you can also avoid reimbursement hang-ups by shopping at FSA Store®, where everything is 100% eligible.)

This guide walks you through filing FSA claims in four steps, then covers what to do if a claim is denied and which mistakes to avoid. Let’s get started.

Step 1: Gather Your Receipts

You won’t get far without receipts for the expenses you want to claim. Whether you track them with a spreadsheet or a shoebox, take a few minutes to collect them for everything you want reimbursed.

To be accepted, a claim needs one of two types of documentation: an itemized receipt, or an Explanation of Benefits (EOB), which is typically used for services processed through insurance. Either should include:

• Patient name: The person who received the service or item. (Retail store receipts often don’t show this, so you may need to add it.)
• Provider name: The provider who delivered the service, or the store where you bought the item.
• Date of service: The date of the service or purchase.
• Type of service: A detailed description of the service or item.
• Cost: What you paid, or the portion not reimbursed by your insurance. If a service went through insurance, the EOB is where you’ll find this.

A note on itemized receipts. You may know what a receipt is for, but your FSA administrator won’t necessarily. The more detail on the receipt, the clearer your claim and the easier it is to get reimbursed. If your administrator asks for more documentation, don’t worry. You’ll have a chance to resubmit. A more detailed receipt, a transaction record from your pharmacy, or an EOB can usually fill the gap.

Step 2: Get Your EOB for Anything Processed Through Insurance

We know, more forms. But this one is easy. Any expense processed through your insurance requires an EOB, which shows the same details a receipt would (provider name, date of service, and so on). The EOB also shows what your insurance paid and what you owe, and that remaining balance is generally the amount you can claim.

If you haven’t received an EOB in the mail, many insurers let you view and download them online.

Just remember, you can’t use your FSA to reimburse expenses that your insurance already paid for, since claiming the same cost twice is considered “double dipping” and isn’t allowed; your FSA can only cover the portion you actually paid out of pocket, such as copays, deductibles, and coinsurance.

Step 3: File Your Claim

Before you file, one tip: The more often you submit claims, the easier it is to stay on top of your reimbursements. You’ll get your money faster, and you’ll always know where your balance stands. Make it a habit—either weekly or whenever you make a purchase or receive an EOB. A spreadsheet saved to the cloud is a great way to track it.

Your FSA administrator will have a specific way to receive claims. Many let you file online or through an app, and others offer a form to complete. Most claims can be filed online, but “most” doesn’t mean “all,” so be ready for some light paperwork.

Before you submit, run through this checklist:

• Check your totals. Make sure your receipts and EOBs match the amounts you’re claiming. A little extra diligence now saves a lot of hassle later.
• If you’re reimbursing for a dependent’s medical expense, confirm the person is eligible. An eligible dependent is your spouse, a qualifying child, or a qualifying relative. For an FSA, that includes your children through age 26. A qualifying relative is someone you can claim as a dependent on your tax return.
• Check for a Letter of Medical Necessity (LMN). An LMN from a licensed healthcare provider is required for some items, including those marked as such on our Eligibility List, and possibly others depending on your administrator. Without one, those items won’t be eligible.
• Include your EOB if insurance covered part of the expense.

This is an overview, so check with your administrator for their preferred process before you start.

Step 4: Get Reimbursed

Most administrators offer direct deposit, though some issue paper checks. Online claims are often processed within a few days, so you likely won’t be without your money for long.

Some administrators will also pay your provider directly. If you owe a provider and have a matching EOB, you may be able to have your administrator send payment straight to them.

What if My FSA Claim Is Denied?

It’s never fun, but you shouldn’t panic. A denial usually just means something was unclear, and there’s often a simple fix that lets you refile. It doesn’t mean you did anything wrong. Here are the most common causes.

You’ve Used Up Your Available Funds

If you’ve already claimed or spent your full annual election, a new claim can be denied. Check your balance regularly, especially before large purchases, so you don’t overspend your benefit.

The Item Isn’t FSA Eligible

The IRS determines which items can be FSA eligible, but employers can set their own rules within those guidelines. Confirm with your administrator that an item is eligible before you buy it.

If you paid with a different card after your FSA card was declined, you can still submit the purchase for reimbursement, but keep in mind it may be denied again if the item isn’t eligible under your plan. 

This is also the moment for a shameless plug: If you buy through FSAstore.com, every item we carry is FSA eligible. As long as you’re using your plan properly (remember, employers can set their own eligibility rules), just save your receipt and submit for reimbursement.

Your Receipts Don’t Match

If you submitted the wrong documentation, contact your administrator right away and ask about resubmitting. It’s usually that simple.

If you used your FSA debit card and your administrator asks you to substantiate the charge, but you can’t find the receipt, you may be able to offset it with documentation for another eligible expense that hasn’t already been reimbursed. Ask your administrator what they accept. 

And you may not need a receipt at all in some cases. At merchants that verify eligible items at checkout, purchases are often automatically approved. We still recommend keeping every receipt, just in case. (Another shameless plug: everything we carry at FSA Store® is eligible!)

Other FSA Claim Mistakes to Avoid

Mistakes happen, but fix them quickly so you aren’t asked to pay money back or are left with funds you can’t use. Two to watch for:

Double expensing. Paying for an eligible expense with your FSA card and then submitting the same expense for reimbursement is a common mistake. Administrators usually catch it quickly. But if a duplicate does get through, you’ll have to repay it (and let’s be real, they will find out).

Claiming through separate accounts. If you and your spouse each have an FSA, don’t submit the same expense under both accounts. That’s double dipping, too. Keep claims separate for each account.



Wrapping Up

Paperwork may not be exciting. But when it comes to eligible items and services you’ve paid for, a little legwork means more money in your wallet and less lost to forfeiture or denied claims. With good receipt habits, regular filing, and a conversation or two with your administrator, filing claims can be an easy process.

Want to skip the last-minute reimbursement hassle altogether? Use your funds where you can be certain everything is eligible. Visit our deadline page to get started.