When you see your physician, visit the pharmacy, or make another healthcare-related purchase, you may wonder “Do I need to keep these healthcare receipts?” In short, the answer is yes.
Whether the purchase was for yourself or a dependent, there are several key reasons to keep your receipts and other related records. For people with a Flexible Spending Account (FSA), Health Reimbursement Arrangement (HRA), or Health Savings Account (HSA), you could be risking your ability to get reimbursed.
6 Reasons to Keep Your Healthcare Receipts
1. Need to verify a purchase
When you sign up for an FSA or HSA, many employers offer a benefits debit card. The cards generally have restrictions on where you can use it (approved merchants) and what you can buy with it (see a list of FSA Eligible Expenses). Most of the time, your purchases are verified at the time of purchase.
However, even when you use your benefits debit card, you may be asked to turn in your receipts to verify the purchase. Of course, if you don’t have a benefits debit card and pay out of pocket, you should always keep your receipts or else you will not get reimbursed.
If there’s a dispute about expenses, your receipts are proof of purchase. A receipt or other paperwork should have:
- Who? – The name of the person receiving the item/service
- What? – Services/items purchased
- When? – Date of service/purchase
- Where? – Service provider/store name and address
- How much? – Cost of the item or service
2. “Run out” claims
If your FSA offers a run out period, you can still file claims after the plan year is over.
For instance, you may have paid out of pocket and later remembered that you did not file a claim for reimbursement. With your saved receipts, you can file a claim for the previous year (within the run out period). A run out period generally lasts up to 90 days after the plan year is over.
3. HRA claims reimbursement
HRA plans are fully funded by the employer and the employer also chooses what IRS-approved expenses to cover. Depending on plan setup, this could include copays, insurance premium reimbursement, prescriptions, dental, and vision expenses. The employee does not pay into the benefit and it does not count toward your income. It’s basically free healthcare money.
However, to access those HRA funds, many HRA plans require that the employee pays first and then submits a claim for reimbursement. If you do not have proof of your expense, you will not get reimbursed.
4. HSA spending
With an HSA, you can only spend your available balance. However, you have the option to file for reimbursement at a later date and can submit those previous receipts. The only catch is that you can only file claims for the expenses you had AFTER the HSA was opened. You can even file a claim years later. Learn more about HSA claim time limits.
5. Healthcare planning
Keeping your receipts is a good way to track how much you spent in the past year. This can help you when you’re deciding how much to contribute to your FSA or HSA next year.
6. IRS auditing
While it is not common, you can be audited by the IRS. It is always a good idea to keep your receipts for up to 7 years in case of an audit.
It cannot be stressed enough – always keep your healthcare receipts. You never know when they’ll come in handy.