When you need to withdraw money from your Flexible Spending Arrangement, how to do it depends on your employer and who the FSA account holder is. Withdrawing from your FSA can be as simple as using a debit card, or you might have to submit paperwork and wait for a reimbursement.
Usually, most FSAs – regardless of the type – require you to submit paperwork for reimbursement. Because you must submit paperwork, it’s a good habit to keep receipts and any paperwork from doctors, specialists, or any medical supplies.
FSAs are slowly moving toward using debit cards and even online bill payment systems. A debit card is preferable to having to pay out of your own pocket up-front, then getting reimbursed. But using a card also makes it easier to use your FSA for non-qualifying expenses: The card may or may not deny a charge if its non-qualifying.
Important: While there are no penalties from the IRS for using money from an FSA for non-qualifying expenses, there may be a penalty assessed by your employer.
If your employer hasn’t started using cards for FSAs, you will need to submit a request for reimbursement. This means you’ll need copies of receipts or statements for how much money is owed. Contact your plan administrator for help with getting reimbursed.
If you’re enrolled in a dependent care FSA, more than likely you’ll have to submit paperwork to be reimbursed for your expenses. You’ll have to provide paperwork for any daycare expense. If using a babysitter (who can’t be another dependent child), you’ll need their name and possibly Social Security Number. Ask your plan administrator what information is needed for reimbursement.