Employers who offer the Benny Card pre-paid debit card in connection with their health flexible spending account plan administered by BAS will find the following questions and answers helpful information for Benny Card holders.
- What is the Benny Card?
The Benny Pre-paid Benefits Card is a special-purpose MasterCard® called “The Benny Card” that gives flexible spending account plan participants an easy, automatic way to pay for qualified health care expenses that are eligible to be reimbursed through a Flexible Spending Account plan. The Benny Card lets participants access the pre-tax dollars they set aside in an FSA and use those dollars to pay for eligible, reimbursable expenses.
- How does the Benny Card work?
It works like a MasterCard®, with the value of the participant's account election stored on it. When a participant has eligible expenses at a business that accepts MasterCard® debit cards, the participant will use the Benny Card to pay for those expenses. The amount of eligible purchases will be deducted - automatically - from the participant's FSA and the pre-tax dollars will be electronically transferred to the provider/merchant for immediate payment.
- How does the Benny Card change how reimbursement works?
With the Benny Card, the participant simply swipes the Card and the funds are automatically deducted from the participant's FSA for payment. The participant still has to retain receipts and other documentation, but the Benny Card eliminates most out-of-pocket cash outlays and reimbursement request paperwork, as well as the need to wait to receive reimbursement checks.
- Why should a participant save receipts and other documentation for all purchases made with the Benny Card?
The IRS requires that every transaction made with any type of Flexible Spending Account prepaid debit card, like the Benny Card, must be substantiated in order to confirm that the cardholder is using the Card to pay for an eligible FSA expense. The IRS considers most expenses paid with the Benny Card to be automatically substantiated at the point of sale. For example, if the Benny Card is used to pay a copayment amount for a prescription, the expense may be automatically substantiated if the plan’s copay amount is identified in the Benny Card System.
Many expenses cannot be substantiated at the point of sale and IRS regulations require cardholders to submit supporting documentation in order to verify the transaction. Examples of expenses that may not automatically substantiate include dental, chiropractor and physician office visits where the amount paid is not equal to an established copay amount that is recognized in the Benny Card System.
If the Benny Card is used for an expense that cannot be automatically substantiated at the point of sale, the merchant will be paid for the expense, but the participant MUST provide documentation to verify that the purchase is an appropriate FSA expense. Substantiation must be submitted in order to validate the eligibility of the expense in accordance with IRS guidelines.
- What is appropriate substantiation?
The Internal Revenue Service places certain rules on FSA contributions and distributions as a condition of allowing participants to receive the tax-favored benefits of FSA participation. One of those restrictions is that all FSA claims must be substantiated with supporting documentation that meets certain requirements. Appropriate substantiation includes the merchant or provider name, the service received or the item purchased the date, and the amount of the purchase. Cancelled checks, handwritten descriptions of charges, card transaction receipts or previous balance receipts cannot be used to verify an expense. Explanation of Benefits (EOBs) and other provider documentation may also be used as verification of an expense.
Medical Service – An itemized receipt/statement or an EOB from the insurance company or health care provider should include: Patient Name; Provider Name; Date of Service; Description of Service (or procedure code); Amount Paid.
Medical Item – Examples of a medical item include nonprescription reading glasses, bandages for a current wound, contact lens solution, etc. A proper receipt should include: Merchant Name; Date of Purchase; Description of Item; Amount Paid.
Prescription – Documentation for a prescription should include: Name of Patient; Name of Pharmacy; Date (fill date); Prescription Number or Name; Amount Paid.
- How long does a participant have to save receipts and other documentation?
Receipts and other documentation should be retained for as long as as the participant would save documentation for tax return purposes.
- What if a participant loses receipts or accidentally swipes the Card for something that’s not eligible?
Usually the service provider can recreate an account history and provide a replacement receipt. Insurers can generally issue a replacement EOB. In the event that a receipt cannot be located, recreated, or if the expense is ineligible for reimbursement, the participant can send a check or money order to BAS for the ineligible amount so it can be credited back to the participant's FSA.
- How will a participant know to submit documentation to verify a charge?
If there is a need to submit a receipt or other documentation, the participant will receive an email from @bennycentral.com. The email will include an attachment with more information. The participant must respond to the emails from Benny Central in order to complete the process for documenting unsubstantiated expenses paid with the Benny Card, as per the Card use agreement received when the card was activated. If a participant does not have an email associated with his or her account, the notifications will be sent by regular mail.
The majority of notifications will be sent each month for services rendered the prior month. However, ALL receipts should be saved per the IRS regulations as there may be instances in which documentation must be submitted outside of the monthly notification.
- What if a participant fails to submit documentation to verify a charge?
If documents to verify an unsubstantiated charge made with the Benny Card are not submitted, then the Card will be suspended until proper documentation is received and the charge is substantiated. If it cannot be substantiated, the participant will be required to repay to his or her FSA the amount charged. Submitting the appropriate documentation or repaying the amount in question will allow the Benny Card to be reactivated.
- What is the Documentation Request Processing Schedule for Unsubstantiated Claims?
If a participant uses the Benny Card for an expense that cannot be automatically substantiated, the participant will be asked for more information as follows:
- Benny Central will send a letter requesting supporting documentation for the expense.
- The participant will have 30 days to respond to the request for documentation. If the response is not received within 30 days, the Benny Card will be suspended and the participant will receive another notification again asking for supporting documentation. Please note that manual claims may continue to be submitted while the card is suspended.
- The card will remain suspended until adequate documentation is provided, or until the account is repaid with after-tax dollars.
- If the participant provides additional documentation, that documentation will be reviewed to determine if the expense can be properly paid from the FSA. If it is determined that the expense can be properly paid from the FSA, the claim will be substantiated and the Benny Card will be reactivated. If after review of the documentation submitted, it is determined that there is not sufficient information to substantiate the claim, the participant will be sent another notification requesting more information. The participant will have 14 days to respond to the request for more information.
- If, based on all of the information provided, it is determined that the expense is not an eligible expense, the participant will receive a notice asking for check in the amount of the expense to reimburse the FSA. When BAS receives the repayment and the FSA is reimbursed for the ineligible expense, the participant's account will be credited and the Benny Card will be reactivated.
- If a participant does not respond to the Benny Central notifications within the identified timeframes, or if the participant does not repay an expense that is determined to be an ineligible expense, the Benny Card may be permanently suspended and will not be reactivated.
