Paper Cuts: Fighting for Control of Your Money in Flexible Spending Accounts

ASIFlex, the company that manages the ins-and-outs of my flexible spending arrangement for health costs, is staffed with polite people who must deal with a lot of upset people.

When you are paying for doctor visits, hospital stays or other health care services, to be told at every turn that you need to justify those costs with an extra layer of paperwork or lose all the money in your account can be anxiety inducing, as I explained on Friday. President Obama recently suggested getting rid of the so-called “use it or lose it rule,” and, while there may be good business reasons to keep it, I have seen very little written about its actual impact on consumers.

The Internal Revenue Service recently issued an alert inviting comments on the possible repeal of the “use it or lose it rule.” I wish I could invite them onto the phone with me for one of my conversations with ASIFlex. They go like this:

Me: Why is it that every time I go to the doctor or a clinic I receive a note saying that my visit requires more paperwork?

ASIFlex: “We always require follow-up documentation for bills that aren’t regular co-pays, like $20, $50 or $100.”

Me: “My plan doesn’t have co-pays. Just a deductible. So are you saying that this isn’t really about making sure that the money is being used for health care costs? It’s just about whether the money is being spent in round numbers?”

ASIFlex: “We don’t make the rules. The IRS does.”

It doesn’t make sense that someone with a plan that includes co-pays would have to follow different requirements than someone with a plan that does not. Often plans with higher deductibles don’t include co-pays at all, and a growing number of companies are turning to high-deductible plans to save money.

Sam Baker at The Hill recently wrote:

Roughly 13.5 million people are covered by high-deductible insurance policies — an 18 percent increase from 2011, according to new research from America’s Health Insurance Plans (AHIP). AHIP tracked policies that have a deductible of at least $1,200 for a single person or $2,400 for a family. Consumers pay lower monthly premiums in exchange for the higher out-of-pocket costs.

And, if my experience is any indication, these folks are bound to run into the same frustration of antiquated bureaucratic hurdles preventing them from efficiently spending their own money on health care.

Here’s more of my conversation with ASIFlex.

Me: “But you make rules, too. Why didn’t you ask for follow-up documentation for this other purchase I made in July?”

ASIFlex: “That must have been from a drug store. We don’t usually need documentation for purchases at drug stores.”

Me: “Doesn’t that seem odd? I can put a six pack and a bag of Cheetos on my card at a drug store. My daughter’s pediatrician sells neither.”

So, you ask, why fight it? Why not just get in the habit of always having your doctor or dentist email a copy of your receipt to the ASIFlex as you’re walking out the door?

That’s a brilliant solution, reader. But ASIFlex does not accept documentation via email.

You read that correctly.

ASIFlex requires you to print out a copy of the notice it sends you and fax it to the company with the receipts.

Sounds old fashioned but simple, right? Except that ASIFlex plays hide-and-seek with the fax number.

Even though you have to log in with a PIN to see anything about your account, to find the fax number, you have to provide your social security number and enter the “Secure Message Center.” The notification about the center says, “This information will be available for viewing for a limited time period.” So move quickly. 

Now, you may remember me saying that the biggest red flag for me when a patient calls with a complaint about health care is a conspiracy theory. So I will try not to sound conspiratorial here. But I do wonder why a company would fight customers at every turn over money customers put into their own accounts. As I explained Friday, if you don’t spend all that money by the end of the year, it goes to the federal government. In a setup like that, the incentives for the private firm managing the account should be customer-focused, to help customers easily use their funds while monitoring for abuse. There should be no upside for the company to hold on to more of the customers’ funds.

The season when employees have to choose their health insurance plans is upon us. The IRS is considering getting rid of the “use it or lose it” rule. It would be worth the time for a health writer or two to take a hard look at the way flexible spending arrangements actually operate. Look at what the IRS rules really say and then document how the companies that run these accounts work to keep customers from spending their own money. 

I’ll have some tips for digging into flexible spending arrangements in a future post.

Related Posts:

Paper Cuts: The Trouble with Health Care Flexible Spending Accounts

Q&A with Dr. Neel Shah, Part 1: Getting Doctors to Consider the Costs of Care

Q&A with Dr. Neel Shah, Part 2: Ideas for Covering the Cost of Health Care