Each time you use your Benny Card, the debit card swipe must be properly substantiated.  This is a very strict IRS rule, and noncompliance can result in the disqualification of your debit card plan, not only for you, but for all participants with debit cards, whether or not their debit card swipes were properly  substantiated.  Properly substantiating debit card swipes can be done by using one of several methods.

Auto Adjudication

If your employer is able, and has set up “tables” in the debit card system, then any debit card swipe (“swipe”) which equals an exact amount found in the table will be auto-adjudicated, and you will not be required to furnish any further documentation.  As an example of this, assume your employer’s medical insurance plan has a $20 co-payment amount for routine office visits, and your employer has set up the required table, then if you swipe your card for $20 at a medical doctor’s office, your swipe amount will match an amount in the table, and you will not be required to furnish any further documentation.  Tables can be set up to match medical insurance co-payment amounts and prescription drug co-payment amounts.

To further enhance this option, IRS will permit for the auto-adjudication of multiple co-payment amounts.  As an example of this, and using the information above, if you swipe your card for $40, or $60 at a medical doctor’s office, those swipe amounts are even multiples (2X, 3X) of the tabled amount of $20, and can also be auto-adjudicated, requiring no further documentation.  Auto-adjudication is permitted for up to 5 times the tabled co-payment amounts, both medical and prescription drug.  There are no tabled co-payment amounts however, for vision care, or dental care, and those swipes will not be auto-adjudicated.

IIAS Merchant Purchases

Additionally, if you purchase eligible items at a certified IIAS merchant, those swipes are adjudicated at the point of sale and no further documentation is required.  You can view a full list of certified IIAS merchants, which is updated continuously, at www.sig-is.org/en/documents/SIGIS_merchant_List.pdf. 

Drugstore.com

Additionally, if you purchase eligible items at www.drugstore.com , through this website link, those “swipes” are adjudicated at the point of sale and no further documentation is required.  You will note from the merchant list that www.drugstore.com is one of many certified IIAS merchants.

Routine Expenses

If you routinely incur the same expense with the same medical facility for the same patient, and the expense has been properly substantiated, then subsequent like expenses may also be auto-adjudicated, requiring no further documentation.  As an example of this, assume your child is receiving allergy shots each week from the same medical facility, and the expense is routinely $4, and the $4 expense has been properly documented each week for several weeks.  The debit card adjudication system will recognize the pattern, and will begin to auto-adjudicate the weekly $4 charge, requiring no further documentation.  This same logic will also work with prescription drug amounts.

Additional Information

Aside from these exceptions, which are permitted by IRS, all other debit card swipes must be expeditiously and properly substantiated.   This requires the participant, within ten days of the swipe, to furnish documentation to show the swipe was for a valid and eligible medical expense and should include (1) the name and address of the service provider (2) the name of the patient receiving treatment (3) a description of the treatment received (4) the actual date the service was rendered, and (5) the charge made for the service.  In lieu of providing this information, you may instead furnish copies of the explanations of benefits from the insurance company.  The forms for submitting debit card claims can be found using the following link to the debit card claim form(pdf).

Regardless of whether auto-adjudication is permitted, participants are cautioned to retain all receipts for all debit card swipes.  In the event of an IRS audit, they may be requested