After you see your doctor, visit the pharmacy, or make another healthcare-related purchase, you may wonder “Why should I keep my healthcare receipts?” Whether the expense was for yourself or a qualified dependent, there are some very important reasons you should keep this paperwork, especially if you have a Flexible Spending Account (FSA) or Health Savings Account (HSA).
When you sign up for an FSA or HSA, many employers offer a benefits debit card, which generally have restrictions on where you can use it (approved stores and offices) and what you can buy with it (see a list of FSA Eligible Expenses). Most of the time, your purchases are substantiated (verified) at the time of purchase.
However, even when you use your FSA benefits card, your administrator may still request you 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 your FSA offers a run out period – you still have the chance to spend any leftover funds after the plan year is over. For instance, if you paid out of pocket, then realize that you need to spend down your FSA or risk losing the money, you can use saved receipts to file a claim for the previous year (within the run out period).
With an HSA, you can only spend your available balance. However, you do have the option to submit receipts at a later date and file a claim for reimbursement. As long as your HSA was opened before you had the eligible expense, you can file a claim for reimbursement at any time – even years later.
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. Here are some planning tips.
If there’s a dispute about which expenses you paid for and which you didn’t, your receipts are hard proof of purchase – with dates, services provided, cost, and payment method.
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.