Debit cards are issued to employees so they can access their pre-tax funds for qualified health expenses. Using debit cards streamline processing reimbursement claims. If the merchant or health provider does not accept debit cards, the employee pays for the expense first and request a reimbursement check from the flex administrator.
Debit Card Access to Qualifed Health Accounts
Debit cards can access funds from different types of health accounts:
- FSA: Flexible Spending Account
- HRA: Health Reimbursement Arrangement
- HSA: Health Savings Account
MCC: Merchant Category Codes
Auto-adjudication is the process of determining what charges are eligible for payment when using the debit card. Since charges to these health accounts must be qualified health expenses according to the IRS, debit cards are processed using Merchant Category Codes (MCC) assigned to health providers.
Here is a partial list of MCCs used by health care providers because they offer only health services:
Include MCC:
- 4119 Ambulance Services
- 8049 Chiropodists, Podiatrists
- 8041 Chiropractors
- 7277 Counseling Services
- 5047 Dental/Lab/Medical Hospital Equipment
- 8072 Dental Labratories
- 8021 Dentists, Orthodontists
- 8011 Doctors NEC
- 5912 Drug Stores and Pharmacies
- 3851 Eyeglasses and Eye Safety Shields
- 5975 Hearing Aids
- 8082 Home Health Care Services
- 8062 Hospitals
- 8052 Immediate Care Facilities
- 2835 In-Vitro and N-Vitro Diagnostics
- 8071 Medical and Dental Labratories
- 8099 Medical Services & Health Practicioners
- 8050 Nursing and Personal Facitlities
- 8059 Nursing & Personal Care Facilities
- 5048 Opthalmic Supplies
- 8044 Optical Goods and Eyeglasses
- 3827 Optical Instruments and Lenses
- 8043 Opticians, Optical Goods & Eyeglasses
- 8042 Optometrists, Opthalmologists
- 3842 Orthopedic and Prosthetic Appliances
- 5976 Orthopedic Goods
- 8031 Osteopathic Physicians
- 7299 Other General Services
- 8063 Psychiatric Hospitals
- 8000 Services - Health Services
- 8060 Services - Hospitals
- 8090 Services - Misc Health
- 8051 Services - Skilled Nursing Care Facilities
- 8069 Specialty Hospitals
- 8093 Specialty Outpatient Facilities
Example: The HRA Debit Card
Employers can restrict what codes are acceptable to automatic adjudication. If the employee attempts to make a purchase at a shoe store with the health debit card, the charge is declined because the MCC for shoe stores is 5661, which is not on the list of authorized MCCs.
Not accepted:
- 5661 - Shoe stores
In this example, the company decides to implement a $1000 HRA to pay for reimburseable medical expenses, but not dental or vision expenses. The HRA administrator then sets up the debit card accounts to exclude the following codes so charges from dental and vision providers are rejected:
Exclude MCC:
- 5047 Dental/Lab/Medical Hospital Equipment
- 8072 Dental Labratories
- 8021 Dentists, Orthodontists
- 5048 Opthalmic Supplies
- 8044 Optical Goods and Eyeglasses
- 3827 Optical Instruments and Lenses
- 8043 Opticians, Optical Goods & Eyeglasses
- 8042 Optometrists, Opthalmologists