We’ve all gotten a few calls about flexible spending accounts (FSAs). It could be an employee at the pharmacy or doctor’s office when their FSA card is locked and unusable or having to help an employee determine what to send for substantiation on a denied claim. Good flexible spending account third party administrators (FSA TPAs) are a fine thing to have unless they are saying “no” more than “yes,” so how do we balance compliance with employee satisfaction? Here are three tips to balance FSA plan compliance with practical use.
1) Never put the overall plan in jeopardy for easy stuff
Make sure the TPA doesn’t automatically approve low value claims without review and that they have consistent requirements for substantiation. Also, get your paperwork in order. The rarely-thought-of documents like POP plan documents, FSA SPDs and more are tedious at first, but rarely need adjustment and are ultimately an employer responsibility. These are simple ways to make sure the plan will function compliantly as a start.
2) When things start to fall apart, ditch the debit card
I know it sounds heavy-handed, but most issues with FSA TPAs come from convenience items like debit cards. Using the debit card leads to employees getting the most frustrated with the process breaking down and what can look like a TPA making your life miserable is just them doing their job. Frequently, if you ditch the debit card and require paper claims, employees are much more diligent about keeping receipts (like they should be in the first place) and the back-and-forth arguing over a claim with a member and your vendor decreases dramatically.
3) Stories of integration are largely exaggerated
Lots of TPAs have the option to “integrate” their claims adjudication with the medical and prescription plan so that as claims come through those plans, your FSA sees them as substantiated and automatically reimburses you. There are a lot of different branding styles for this service but they tend to cause the same problems: complacency and confusion. Just imagine, employees getting checks in the mail or automatic deposits they don’t recognize or worse, not getting those payments when they are expecting them and no paper trail to audit or justify the payments or lack thereof. What if the explanation of benefits (EOB) is late getting to the member? What if the claim is paid but then adjusted? This is all a tracking nightmare and I suspect that any of you that have signed up for these types of services have been quite surprised at how different the sales pitch is from the actual execution. Implement at your own risk.
Match your vendor to your needs
These tips offer some guidance on how to navigate these plans and keep them as they are intended – simple enhancements to your benefits. If your administrative burden is anything but simple, you may consider another partner. No employer wants to risk the nontaxable status of their plan at risk but this benefit supplement isn’t worth risking your daily sanity over either. Aldrich Benefits partners with you to find the right vendor for your needs.
Meet the Author
Aldrich Benefits LP
Mandi has over a decade of experience in the employee benefits world. Prior to joining Aldrich, Mandi served as an account manager at a brokerage firm in Portland, Oregon, specializing in health and life insurance for groups ranging from 100-4,000 employees. Her experience also includes providing benefit calculations for retirement plans at a large actuarial…
- Self-funding and complex contracting
- Consumer-driven healthcare plans
- Plan compliance
- Financial Analysis