As if I don’t have enough cards in my wallet, the vendor for my employer’s health care Flexible Spending Account (FSA) sent me a MasterCard debit card. I’m supposed to use it for items eligible for reimbursement from the FSA.
The pitch from the FSA vendor is that I won’t have to file reimbursement claims for items I charge to the debit card. But I’m still required to save every receipt. They can come back and challenge me for the eligibility of the purchase and I must then send them the receipt showing what exactly I bought with the card. Using the card is only going to complicate matters. Because the card is good only for FSA eligible expenses, if I buy a 12-pack of soda together with a prescription at a drug store, I must pay for the drugs with the FSA debit card and pay for the soda with cash or a different card. It’s also only accepted at stores which installed a special computer system which distinguishes FSA eligible items from non-eligible items. If I charge the co-pay for a doctor’s visit to the FSA debit card, and the insurance company later tells me I haven’t met the annual deductible yet, I still have to file a paper claim to the FSA but I also have to explain to them that the co-pay is already reimbursed but the deductible isn’t. What a mess.
I’m afraid this is just an attempt from the FSA vendor to capture the merchant fees from the purchase. The FSA debit card came with no PIN. All transactions must be processed as “credit.” If I use their card, I won’t receive the 5% rebate from drug stores or the 1.5% rebate from elsewhere on my own credit card. Thanks, but no thanks. I cut up the FSA debit card without even activating it.
Related post: Why Banks Push Debit Cards