Use of Debit and Credit Cards by Cafeteria Plans Approved

The Internal Revenue Service has ruled for the first time that properly substantiated employer-provided medical expense reimbursements made through debit or credit cards under a health reimbursement arrangement (HRA) or health care flexible spending account (HCFSA) are excludable from gross income under Section 105(b) (Rev. Rul. 2003-43). The use of debit or credit cards by HRAs and HCFSAs will greatly streamline the reimbursement process and will eliminate employees' out of pocket expenses at the point of service - making these programs much more appealing to employees.

13 minute readSeptember 01, 2003 at 01:18 PM
By
Kara A. Getz
Ruth M. Wimer
Use of Debit and Credit Cards by Cafeteria Plans Approved

The Internal Revenue Service has ruled for the first time that properly substantiated employer-provided medical expense reimbursements made through debit or credit cards under a health reimbursement arrangement (HRA) or health care flexible spending account (HCFSA) are excludable from gross income under Section 105(b) (Rev.

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