FSA/HSA/HRA Card Declines
Description
Common reasons that FSA/HSA/HRA cards decline and how to troubleshoot them
What's in this article?
Here are some of the most common reasons why health spending account card (also known as flex card or FSA, cards are declined:
| Decline Reason | Troubleshooting |
|---|---|
| Card not activated | The card hasn’t been activated. Perhaps the card holder received the card in the mail and forgot or simply did not call to have it activated. |
| Insufficient account balance | There aren’t enough funds on the card to cover the purchase. |
| Purchase of non-eligible items | Health spending debit cards can only be used for qualified medical expenses (allowed by the benefit plan). A list of qualified medical items can be found under IRS code 502. What the card holder thinks should qualify, what the IRS says could qualify and what their benefit plan will qualify may differ. Dental Work Example According to the IRS, FSA cards can be used for X-rays, fillings, extractions, dentures, caps, crowns, fluoride treatments, implants, etc. However per the IRS, FSA cards cannot be used for bleaching/teeth whitening and bonding of the teeth, because they are considered cosmetic expenses not medical expenses. |
| Merchant Category Code (MCC) | Health spending debit cards are designed to work only at merchants that provide eligible items or services. An inaccurate MCC can result in declines, for example if a massage therapist is coded as a "massage parlor" instead of as a 8099-Medical Services & Health Practitioners, the card will decline. |
| Card use at a non – IIAS merchant location | The store or pharmacy must have an electronic system with the ability to differentiate qualified medical expenses from non-qualified medical items. True pharmacies registered under the 90% rule program do not have to meet full IIAS requirements. Even then some benefit plans will not approve transactions at pharmacies who do not meet full IIAS standards. Per SIGIS “employer benefit plans have the right to either accept or decline transactions from merchants who self certify under the 90% Rule”. |
Contacting card issuer for declines
The card holder should contact the card issuer for further explanation of decline reasons. A merchant will be unable to discuss reasons for decline directly with the card issuer.