Who do I contact about this HSA/FSA/HRA question?

[Micaiah]

Is there some sort of process that medical services providers go through to be able to accept HSA/FSA/HRA debit cards and have the company that holds the funds on those cards, approve it? Is this something that every medical provider must proactively do, or is it set in place automatically by the company that controls the funds and card?
A little background: I have a friend that is a massage therapist, and she had a client present her with an HSA card to pay for her massage, but they could not get it to accept a charge from the therapist. I have found where massage therapy *can be* a covered expense, but a letter of medical necessity is required, so this leads me to believe that perhaps the massage needs to be paid for up front by the patient, and then the patient would need to submit a request for reimbursement to their HSA company along with the letter of necessity. Does this sound correct? Any guidance on which organization can help me with questions about HSA/FSA/HRA's would be welcomed as well. I just am not finding much except for each individual company's guidelines so I'm not sure if this has to be set up and any questions answered by only specific individual companies or if there is some larger overseer type organization that can help with these types of questions. Thanks so much!

 

[somarco]

HSA/FSA etc bank cards are not ordinary debit cards. They are encrypted to prevent using them for purchases that may not be covered.

For example, your grocery store may have a pharmacy. The card can be used at the pharmacy to purchase medication but you cannot use it in the checkout line to pay for your beer & pizza. The card won't work there.

 

[LostDollar]

Caveat, not an agent.

I am not aware that our HSA cards are specially coded. It is my understanding that it is our responsibility to report non=medical purchases on the form filed with our tax return and to then pay the appropriate penalties along with our income taxes.

Had your friend's customer deposited any money in their HSA account? Lack of funds (either from no deposit or a used up deposit) would certainly cause a card to be declined.

 

[LostDollar]

(I have used an FSA card both at the grocery store pharmacy and in its checkout line, but only for FSA eligible expenses. )

 

[Micaiah]

Caveat, not an agent.

I am not aware that our HSA cards are specially coded. It is my understanding that it is our responsibility to report non=medical purchases on the form filed with our tax return and to then pay the appropriate penalties along with our income taxes.

Had your friend's customer deposited any money in their HSA account? Lack of funds (either from no deposit or a used up deposit) would certainly cause a card to be declined.

LostDollar, thank you - I believe this person had used their HSA card for a massage at another facility shortly before this, actually. One of the bigger chains. So that's why my friend was thinking it wasn't lack of funds but maybe it was something she had to go and get qualified for with the HSA company, or with the government or...?

 

[LostDollar]

All I can tell you is,
My wife has an HSA eligible ACA health plan. The insurance company has nothing to do with the cash account. She has that in a local financial institution.

I had to complete a form 8889 with our tax return last year, and would have had to add the appropriate penalties to our taxes if any expenditures had been non HSA eligible expenses.

 

[LostDollar]

I suppose now I am going to have to try to charge a candy bar on our HSA card sometime, just to see for sure how our specific cards work.

 

[DS4]

I suppose now I am going to have to try to charge a candy bar on our HSA card sometime, just to see for sure how our specific cards work.

Just take the candy bar and pay for it at the pharmacy dept

 

[leevena]

Somarco is right. The card issuer does not allow these types of cards to be used at every location that accepts their cards. The issuer allows certain merchant category codes (medical offices, hospitals, diagnostic labs, etc.) to accept this particular type of card. Massage therapists are what I call a grey area, by that I mean their services can be covered but there needs to be a Letter of Medical Necessity from a medical provider. Without knowing more about this particular situation, I would guess the expense is being blocked by the card issuer pending the letter.

 

[LostDollar]

Note: The comments in this post relate only to HSA debit cards.

Online searching indicates that op's situation may, or may not, be the result of card restrictions.

Different card issuers may apply different restrictions.

For example: in regard to ATM withdrawals to reimburse yourself for eligible medical expenses paid out of your own pocket; on-line searching will show some big financial institution card issuers allowing that, but at least one that doesn't.

Two instances of an HSA debit card being accidentally used for the purchase of a sandwich showed up very quickly. I suspect those are representative of many more such instances across the country in any given year. Here is one of the articles:
What If You Use Your Health Savings Debit Card For Take-Out?

Additional comment on the issue:
HSA Qualified Expenses

Be very careful not to use your HSA debit card or checks on non-eligible purchases. If you spend your HSA funds on unqualified expenses, whether intentionally or by accident, the transaction will go through, and you’ll have to pay income tax on the amount.

Yes, you read that correctly—even if you accidentally paid for a burger with your HSA debit card, you will have to report it on your annual income tax return and pay taxes on it. If you’re under 65 and spend the money on unqualified purchases, you must also pay a 20% penalty on top of the income tax. Be very careful not to use HSA money on unqualified expenses so you don’t lose a portion of your savings to taxes and penalties.