Paper Cuts: ASIFlex Answers Questions About Flexible Spending Accounts
It’s not easy to find a human being on the ASIFlex website. The Missouri company manages flexible spending arrangements for people trying to protect their health spending from taxes, and, as I wrote last week, they can be a little inscrutable. I have been struck by the amount of documentation required to justify spending my own money out of my ASIFlex account, and I wondered in print whether there were incentives for the company to make it so hard. I submitted a series of questions via the anonymous “secure online portal,” and I received a reply a few days later from Andy Moore, the director of marketing. My questions and his responses are below.
Q: What exactly triggers ASIFlex to require follow-up documentation?
A: The IRS has provided four safe harbors whereupon we are not required to ask for substantiating documentation to support a FSA debit card transaction. Those safe harbors are:
1) if a purchase exactly matches a co-payment, or any combination of co-payments up to 5 times the highest, for the health plan that cardholder has selected through his/her employer.
2) If a purchase is substantiated via a claims feed from the insurance carrier
3) If a purchase is a recurring purchase that has been substantiated once via a paper claim and is for the same amount at the same provider.
4) Occurs at a retail outlet that has implemented the Inventory Information Approval System (IIAS).
All other transactions will prompt a request for additional documentation. Approximately 82% of all of our transactions are electronically substantiated, meaning that no documentation is required for these 82%.
Q: Why isn't it seen as legitimate when a bill comes from a doctor's office or hospital? Shouldn't those providers be in the ASIFlex system in some way to prove that they are actually medical providers?
The type of merchant only matters in determining if a transaction can go through at the point-of-sale. The merchant type is not really a part of the electronic adjudication process, besides IIAS. If the transaction doesn't meet one of the safe harbors listed above, the transaction will require follow up documentation, regardless of the merchant. This is according to the IRS rules.
Q: Why does ASIFlex require documentation for doctor's office and hospital visits but not pharmacy purchases?
A: Almost all pharmacies have implemented IIAS, which is a point-of-sale software system that recognizes the cardholder is using pre-tax dollars to pay for his/her items, and that only certain items can be paid for with the card. For example, if I go to an IIAS merchant (e.g. Walgreens, CVS, Wal-Mart, Target, etc.) and swipe my FSA debit card for an eligible expense such as contact lens solution and a six pack of cola, my card will pay for the contact lens solution and ask for a separate form of tender for the cola. These transactions come through Visa/MasterCard with a flag indicating they took place at an IIAS merchant, so we do not need to ask to see what was paid for, as the merchant is responsible for insuring that only FSA-eligible items are paid for with the card. Most of our transactions are for pharmacy purchases, and occur at places that have implemented IIAS.
Q: Why doesn't ASIFlex allow documentation to be sent via email?
A: HIPAA rules state that email is not a secure method of transmitting data, so we don't accept documentation that includes Private Health Information (PHI) via email, because if we did, it would seem that we are encouraging people to send PHI via an unsecured method. We do allow for documentation to be uploaded via our secure website.
Q: Why does ASIFlex make it so hard to find the fax number?
A: Honestly, I wasn't sure we did. It is pasted all over our website and is on almost all of our materials.
Q: What sort of changes would have to be put in place to make the process more efficient?
A: We work with our clients to set up the claims feed from insurance providers/carriers, but this is often difficult to get done and requires quite a bit of pressure from the client to the carrier.
Q: How exactly does ASIFlex make a profit?
A: We charge a per participant per month administrative fee.
Q: Is ASIFlex incentivized in any way to stop claims from going through or does the company make more profit if people spend all the money in their FSAs?
A: We do not hold the FSA funds. We only ask for reimbursement for claims/card transactions that we have already paid. Any forfeitures are retained by the employer.