What Stores Can I Use My Flex Card At?

A “flex card” typically refers to a debit card linked to a Flexible Spending Account (FSA) or a Health Savings Account (HSA). These accounts allow individuals to use pre-tax funds for qualified health or dependent care expenses, offering a convenient way to manage healthcare costs while providing tax benefits. The funds are specifically designated for eligible medical, dental, and vision expenditures, as defined by the Internal Revenue Service (IRS).

Understanding Eligible Merchants

Not all stores are equipped to accept flex cards for every item they sell. The ability of a merchant to accept these cards for eligible expenses often depends on their participation in a system that identifies qualified purchases. Common places where flex cards are readily accepted include pharmacy chains, drug stores, healthcare providers (such as doctor’s offices, dentists, hospitals, and clinics), vision centers, optometrists, and Durable Medical Equipment (DME) suppliers.

Some general merchandise stores, including supermarkets and big-box retailers, can also accept flex cards if they have dedicated “FSA/HSA eligible” sections or specialized point-of-sale systems. This is largely due to the Inventory Information Approval System (IIAS), mandated by the IRS for merchants selling healthcare-eligible products. The Special Interest Group for IIAS Standards (SIGIS) oversees this system, which allows merchants’ systems to automatically confirm the healthcare eligibility of items purchased with an FSA or HRA card. Merchants implementing an IIAS use a pre-established list of medical expenses to identify eligible items at the time of purchase.

Identifying Eligible Expenses

Even at a merchant that accepts flex cards, only specific items and services qualify as eligible expenses, as defined by IRS regulations. The IRS provides guidance outlining what constitutes a medical expense. Common eligible expenses include prescription medications, medical co-pays, and deductibles for healthcare services. Dental treatments (excluding cosmetic purposes) and vision care (such as eye exams, eyeglasses, and contact lenses) are also covered.

The CARES Act expanded the range of eligible items. This legislation permanently removed the prescription requirement for over-the-counter (OTC) medications, making products like pain relievers, cold and flu remedies, and allergy medications eligible. Feminine hygiene products, including tampons, pads, and menstrual cups, were also added. Certain medical devices like thermometers and blood pressure monitors, along with first aid supplies and bandages, are eligible. Costs for medically necessary services like acupuncture and chiropractic care can also be covered. Items related to COVID-19 prevention, such as tests, masks, and hand sanitizer, are also considered eligible.

Generally, expenses merely beneficial to general health, such as vitamins (unless prescribed for a specific medical condition), cosmetic procedures, or gym memberships, are not eligible. While IRS guidelines provide a broad framework, specific plan details can vary. Individuals should consult their plan administrator for precise eligibility rules.

Making Purchases and Maintaining Records

When using a flex card, the process at the point of sale involves swiping or inserting the card like a regular credit card; a Personal Identification Number (PIN) is usually not required. If a transaction is declined, it could be due to an ineligible item, insufficient funds, or the merchant’s system not recognizing the item as eligible. Some transactions, particularly for services or prescriptions, may require further substantiation by the plan administrator after the purchase.

Maintaining detailed records for all purchases made with a flex card is important. The IRS requires that all FSA and Health Reimbursement Arrangement (HRA) transactions be substantiated, verifying the purchase was for an eligible medical expense. While some transactions at IIAS-compliant merchants may be automatically substantiated, individuals should retain itemized receipts. These receipts should clearly show the date of service or purchase, the provider or merchant’s name and address, a detailed description of the item, and the amount charged.

These records are important for potential substantiation requests from the plan administrator or in the event of an IRS audit. For HSA holders, the account holder is responsible for maintaining documentation for tax purposes, typically for at least seven years. If a flex card was not used or a transaction was declined, individuals can submit a manual claim for reimbursement by providing their plan administrator with the detailed receipt and a completed claim form.