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<nobr>Jul 13, 2006</nobr>
IRS Issues Notice Medical and Dependent Care Debit Cards
The IRS has issued Notice 2006-69, July 11, which provides employers more flexibility in substantiating claimed medical expenses when employees use debit and credit cartds in medical reimbursement and dependent care assistance programs. The purpose of the notice is to: - provide guidance on the use of debit and credit cards to reimburse participants in self insured medical reimbursement plans;
- clarify certain substantiation methods and requirements that apply to medical reimbursement plans; and
- provide guidance on the use of debit and credit cards to reimburse participants in dependent care assistance programs.
Notice 2006-69 follows Rev. Rul. 2003-43, which addresses the use of cards to reimburse participants in health FSAs and HRAs and includes guidance on acceptable methods for substantiating medical expense charges. Notice 2006-69 provides for additional methods for substantiating claimed medical expenses by expanding the copayment match substantiation methods and providing for the approval of reimbursements using an inventory information approval system. The notice also provides for direct third-party substantiation of claims and includes an explicit prohibition against self-certification of expenses.
With regard to dependent care assistance programs, the notice includes general guidance regarding the use of a debit or credit card to provide such benefits.
Text Files:
IRS Notice 2006-69
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