Top 5 Reimbursement Claim Denial Reasons

Reimbursing yourself for eligible medical costs should be easy. But often, simple oversights or misunderstandings can result in claim denials for your Flexible Spending Account (FSA). To help you avoid such errors and receive your reimbursement as quickly as possible, here are the most common FSA denial reasons.

Requirements for reimbursement documentation

1. Documentation is incomplete, not readable, or missing.

By far, the most common reason for claim denial is related to documentation. The Internal Revenue Code (IRC) requires that all FSA expenses be verified with itemized receipts, third party statements, or an Explanation of Benefits.

When submitting documentation for your FSA, make sure everything is clear and readable. And, be sure to include all the following details:

Provider name
Date of service
Patient name
Description of service/product
Amount billed

Remember—canceled checks, credit card receipts, and bank statements are not proper forms of documentation.

2. The expense is not eligible for reimbursement under your plan.

If you submit a claim for an item or service that is not eligible for reimbursement under your FSA, that claim will be denied. To help avoid such denials and ensure your claim is eligible, check out this list of common eligible FSA expenses.

3. Service dates are not within the eligible plan year.

When submitting a claim for reimbursement, check to make sure the expense was incurred during your plan year. For example, if your FSA’s plan year is January 1 to December 31, 2020, the expense should be incurred during 2020 only. If your plan includes a runoff or grace period, dates for submitting and incurring expenses may differ. You can check your plan’s specifics by logging into your American Fidelity online account.

4. A doctor’s note and/or recommendation is required for this service or product.

Did you know a prescription is required for over-the-counter medication? And certain items—like dietary supplements—require a doctor’s note to be eligible for reimbursement. This list of eligible FSA expenses can help you prepare for such limitations.

5. Maximum reimbursement amount exceeded for coverage period.

When you enroll in an FSA, you set aside a certain amount to use toward eligible medical costs. That amount may not exceed the maximum allowed by the Internal Revenue Service (IRS) each year.

As you submit eligible claims and receive reimbursement, the amount in your account will decrease. When all the funds have been used, you will not be able to receive any further reimbursement for that plan year.

To check your FSA balance, log in to your American Fidelity online account or download AFmobile^®.

For additional Flexible Spending Account support, visit americanfidelity.com/hcfsa-help.