For the convenience of my colleagues in Massachusetts Commonwealth employment, I post here the fruits of my recent investigation into the state's FSA service. I beg the indulgence of persons beyond, for whom this item will be of limited interest.
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OPEN MEMORANDUM
9 February 2017
From Richard J.
Peltz-Steele
in personal
capacity, but for purpose of identification: Professor, UMass Law School
Re Service of
ASI Flex as the FSA provider for GIC
Cc ASI Flex c/o
Kaleena Kollmeier, Account Manager
GIC c/o
Rachelle S. Mercier, Esq., MPH, Associate General Counsel
UMass
Dartmouth community c/o UMD Forum listserv
I. Introduction
I have experienced growing frustration with ASI Flex as
Flexible Spending Account (or Arrangement) (FSA) service provider for the Group
Insurance Commission (GIC). I will here
conflate the two components of the FSA, the Health Care Spending Account (HCSA)
and the Dependent Care Assistance Program (DCAP). My experience is exclusively with the HCSA,
which is to speak neither favorably nor unfavorably with respect to the DCAP.
This month, a straw broke my camel’s back when a document
verification submission I made for medical expenditures on my FSA Visa was twice
rejected for insufficiency, despite my submission of the requested documentation. The rejections were improper; ASI Flex’s
investigation of the matter confirmed error.
I appreciate ASI Flex’s investigation and correction of the matter. I am nevertheless left with boiling
frustration over repeated problems.
Given the substantial time and energy that I have to invest in working
with ASI Flex to claim or document disbursement of my own money, I am left to
wonder whether the slim benefit of a tax advantage is worth the effort at all.
Accordingly, I conducted an informal investigation of the efficacy
of ASI Flex participation. This
investigation has three prongs. First, I
sought input from my colleagues at UMass Dartmouth (UMD) to contextualize my
experience with the experiences of others.
Second, I talked with ASI Flex Account Manager Kaleena Kollmeier, to
explain my concerns and better understand ASI Flex’s position. Third, I requested from the GIC all effective
contracts and terms of service that govern or affect the relationship of GIC
claimants with ASI Flex.
In this memorandum, I will share my findings in each vein
and draw modest conclusions.
II. Feedback from UMass
Dartmouth
I was struck on two counts by the responses to my informal
query at UMD. First, I was surprised
with the high level of anxiety, frustration, and vehemence that came through
the communications. I expected that some
others, like me, might report occasional bad experiences. I did not expect to find so many people at
the end of their ropes, having already terminated participation in the FSA
program or contemplating termination.
Second, strong common threads of complaint came through the
communications. That is, the problems
people report with ASI Flex arise with remarkable consistency from a specific
problem, namely the process of follow-up documentation for FSA Visa card
transactions. One might hope that such
consistent focus might make resolution more feasible.
I will transcribe here representative comments from my UMD
colleagues, without attribution so as to protect respondents’ privacy.
First, there were some positive comments.
I have not had problems at all. [On follow up, respondent wrote that she does
not use the FSA Visa, but submits paid receipts and documents through the
online interface.]
I have never had any problems with them. I have used them for reimbursements of day
care and summer camps only and provided them with the receipts each time. Always received prompt payments. [On follow up, respondent wrote that she used
only DCAP, filing reimbursement requests, and not HCSA and FSA Visa.]
The more numerous negative comments almost all concern the process
of follow-up documentation. I have
grouped these comments loosely:
● efforts to work on documentary
demands;
I’ve not had any trouble with claim denials,
but I find that nearly every time I use my [FSA Visa] card for an “uneven
expense,” $333 or $29.14, I’m always asked for documentation. If the charge is a round number $30, $400, at
the same vendors (dentist, eye doctor, optometrist, pharmacy) the charges sail
through.
[T]he number of requests for documentation “for
IRS purposes” certainly has been more frequent than I expected.
At first, it annoyed the heck out of me that
I needed to gather additional documentation for the insurance folks, after
years of not needing to do so. I later
learned that some of the providers I use (my kids’ dental, for example) only
submitted the charge and did not include explanation for the charge. Now I pretty much know which providers need
to be reminded to give me an invoice that states the work that was done, so I
can scan it over to ASI.
I . . . have questioned their
constant request for additional information on a charge, as little as a $10
copay. I’ve had to go retrieve receipts
several times, and often they are from the same office. You can clearly see they are all from a doctor’s
office. I did call and ask why they are
questioning so many things that in the past never seemed to be an issue. After all, this is our money. The individual I spoke with could not answer
any of my questions. I’m not impressed
with this company.
● burgeoning frustration working on
documentary demands; and
After jumping through many frustrating hoops
with ASI Flex, I have learned to just keep a scanned copy of every single
receipt, and to request some type of invoice for every single service to
include with that receipt. When I
provide a receipt which clearly states the name of a doctor’s office at the
top, I’m not sure why they can’t presume that it is a co-pay, since I’m not
sure what else anyone would pay a
doctor’s office for, but whatever. I got
tired of going back and forth with them on these things and found that if I
just do it this way, more often than not, they don’t ask for
receipts. . . . [T]hey are a pain to work with!
I am having significant issues with ASI Flex
and documentation requirements. I have
had multiple issues, and some of the documentation claims seem random. Follow-up documentation has been rejected for
no reason.
[A]ll of my bills are paid with the Visa debit
card [ASI Flex] issue[s]. Having said
that, I have been very dissatisfied with the amount of documentation I am
required to provide ASI Flex, including almost every payment made to [provider
name redacted]. [O]ne would have thought
that once a vendor is in the system, that should suffice. I always thought that the onus was on the
employee in case of an audit and not the employer. I have complained to HR before about them.
● pushed to the breaking point.
ASI Flex is a disaster, and I have complained
to HR about it on a few occasions. I
continue to be denied payment despite having all of the proper paperwork from
the doctors. I actually may not renew it
because it is such a mess.
I did participate in ASI Flex last year, but
it got to the point where I was needing to scan and upload each doctor visit
from [provider], which seemed excessive, before I could use my card, my money, so
I decided not to continue with it. . . . [I]t’s sad that they make the process so
cumbersome! I could understand if you
were making purchases of dubious intent at Rite Aid or CVS, but when the bill
is directly from a doctor’s office? . . . I
think the company we used before ASI Flex . . . was much easier to
deal with, and I don’t think I ever had to submit additional paperwork. Maybe we can go back to them?
I got so frustrated and angry with ASI Flex
that I discontinued enrollment in the program. They wanted documentation for every
transaction. I had to call them a number of times as well as providers to get
the right documentation. It makes my
blood boil again to remember back on having to deal with them.
I found them very difficult to work
with. My son had a [medical procedure,
redacted for privacy], and their continual requests for documentation for his . . .
medications and other documentation—quite simply made the program more trouble
than it was worth. I did not re-enroll
in the program.
I stopped using ASI Flex, as I found their
process to be ridiculous and cumbersome.
I agree that their request for extra information seemed superfluous most
of the time. I had never had issues with
BenStrat [the predecessor FSA provider], only having to explain the odd request
(such as therapeutic massage . . . ). . . . [F]inally I dropped [ASI Flex]. Terrible
experience, and I don’t know why we went from a great company in New Hampshire to
an awful company in Missouri.
Noteworthy here to my mind is the common thread of follow-up
documentation. This same problem has
fueled my own frustration. I learned
from ASI Flex a couple of years ago that medical expenses charged to the FSA
Visa card will require follow-up documentation for every expense other than a
co-pay in a doctor’s office—perhaps the even amount referred to by one
respondent—and an Rx co-pay at the pharmacy counter.
Thus some questions are raised. Is all
of this follow-up documentation necessary?
Why is the follow-up documentation
process so burdensome? And why are
claims denied even after follow-up documentation is provided?
The respondent who pointed out that the burden of audit
falls on the claimant, not on ASI Flex, makes a fair point. And more than one respondent aptly wondered
why ASI Flex cannot track a registry of providers, so that follow-up
documentation is not required again and again for the same provider, even for
the same service.
When ASI Flex demands follow-up documentation, the claimant
is forced to be the go-between, shuttling, sometimes physically, back to
providers’ offices—often requiring multiple telephone calls during restrictive
business hours—to try again and again to secure documentation that will satisfy
ASI Flex. Then the user has to organize
and submit that documentation to ASI Flex, whether by mailing it, or by
scanning and uploading to the secure online portal. The process is time consuming and labor
intensive, a far cry from the ease of use that an FSA Visa card promises.
Adding insult to injury, I and others experience problems
with claim denial or documentation rejection subsequent to the provision of
follow-up documentation, whether because the documentation is not sufficient
for ASI Flex’s purpose, or because of ASI Flex error.
Heavily complicating matters is the complexity of
communication between claimant and ASI Flex.
ASI Flex reserves for itself the ease of communicating with claimants
through the online “Secure Message Center.”
Its messages are often far from helpful.
For example, this was the explanation of one (erroneous) claim denial I
received:
We received your submission for documentation to
support a debit card transaction that could not be electronically substantiated
and could not process it because the statement does not include the necessary
information, the charges on the submitted statement do not match the
outstanding card transaction OR the item is not eligible through your
employer's FSA program. This transaction will still appear in your online
Account Detail as requiring documentation, and if you do not take action, may
lead to your FSA debit card being suspended. In order to resolve this
situation, please submit a statement for an eligible expense that you paid for
out-of-pocket (i.e. did not use your FSA debit card to pay for) with a
completed and signed claim form, send in the correct itemized statement of
services for this transaction, or send in a check or money order payable to
ASIFlex for the amount in question. Please call ASIFlex at 800.659.3035 with
questions.
Clearly some representative at ASI Flex found my follow-up
documentation wanting, but why? Three
possible reasons are cited in the alternative.
Would it be impossible to narrow it down to one?
A more troubling problem with the Secure Message Center is
that it is only a one-way channel of communication. A claimant’s options to follow up on secure
message such as this one, maybe to ask for clarification, are limited. A telephone call is invited, but no hours to
call are stated. In fact, the line is
staffed for some evening and Saturday hours, but not 24/7. ASI Flex has an email address,
asi@asiflex.com. But that address is not
stated in the claim denial nor shown anywhere on the claimant’s interactive
website, my.asiflex.com. Email to that
address anyway is neither secured nor tied to the claimant’s account and
matter. Thus the claimant is left with a
vague denial of payment and no good way to respond.
That claimants bear the heavy burden of having to deal with
providers on the one hand—subject to their whimsically inadequate
documentation, limited channels of communication, and narrow business hours—and
then have to deal with ASI Flex on the other hand—subject to cumbersome
communication portals, vague claim denials and documentation rejections, and,
again, limited channels of communication during only slightly more generous
business hours—is a recipe for, as one respondent put it, “disaster.”
III. Feedback from ASI Flex
ASI Flex Account Manager Kaleena Kollmeier allowed me to
voice complaints, provided me some helpful additional information, and
expressed a commitment to improving ASI Flex service. Here I share some of what I learned with
respect to the problem of follow-up documentation. Naturally what Kollmeier told me I recount
here in my words, so accuracy may be limited by my understanding.
With respect to the need for follow-up documentation, I,
like some respondents, remembered BenStrat being less demanding of follow-up
documentation than ASI Flex. Kollmeier said
that ASI Flex follows industry norms with respect to follow-up documentation
for FSA Visa card purchases—my observation being essentially correct that only round-number,
doctor’s-office or pharmacy-counter co-pays will go through unchallenged—and
that ASI Flex practice in that respect might mark a necessary departure from
the practices of a former provider.
Kollmeier said that ASI Flex is required by the IRS to make
disbursements only upon evidence that the provider, service, and dates of
service meet eligibility criteria and match the claim by patient identity and
amount of charge.
You must provide the health FSA with a written statement from an
independent third party stating that the medical expense has been incurred and
the amount of the expense. You must also provide a written statement that the
expense has not been paid or reimbursed under any other health plan coverage.
The FSA cannot make advance reimbursements of future or projected expenses.
Debit cards, credit cards, and stored value cards given to you
by your employer can be used to reimburse participants in a health FSA. If the
use of these cards meets certain substantiation methods, you may not have to
provide additional information to the health FSA
I note, however, that this text does not directly contradict
the observation of one respondent, that the onus of audit falls on the
claimant. I suggested to Kollmeier, and
maintain, that ASI Flex is engaging in excessive scrutiny.
With respect to the plea of some respondents that ASI Flex
should be able to track providers and recognize doctor’s offices as inherently
within FSA coverage, Kollmeier said that in fact some doctor’s offices do
provide services that are not eligible for medical reimbursement, such as
massage therapy without special approval.
On that basis, ASI Flex regards itself as bound to inquire as to the
nature of all services provided, on every occasion, for payments, even to doctor’s
offices, in excess of routine co-pays.
With respect to the explanation of claim denials, Kollmeier
said that the language of messages, such as that which I quoted above, is
agreed upon between ASI Flex and the GIC.
I note that that fact might move some of the blame for vagueness to the
GIC, but does not mean that claimants are being well served.
With respect to communication deficiencies, Kollmeier acknowledged
limitations and suggested that there is room for improvement. She also educated me as to some avenues of
communication that might help.
First, Kollmeier told me that claimants may use—not to
submit claims, but to communicate with ASI Flex—the email address
asi@asiflex.com.
While this email
address is not published on the claimant’s account website,
https://my.asiflex.com/, it is visible on
the lower-right corner of the general ASI Flex website,
http://www.asiflex.com/, where there are
also toll-free telephone and fax numbers.
I note that this ASI Flex home page is not a web page that claimants are
encouraged to consult; indeed, I did not know it existed.
It is useful to know moreover that there is an ASI Flex home
page specifically dedicated to ASI Flex service of the GIC account,
http://www.asiflex.com/gic/.
Second, Kollmeier told me about the evening hours of the
toll-free telephone line. The line is
staffed 8-8 Monday through Friday and 10-2 on Saturday.
Third, Kollmeier told me about the ASIFlex Mobile App, which
is available in the Google Play Store and the Apple App Store. ASI Flex has publicized the app, and I knew
it existed. But I did not know that it
had any functionality superior to the web portal. Kollmeier told me that it has one functionality
that might make life easier for claimants to provide follow-up documentation,
that documentation can be submitted via smartphone photograph.
IV. Contracts and Terms of
Service
I requested from ASI Flex, via Ms. Kollmeier, and from
the GIC, via online public record request, all effective contracts and terms of
service that govern or affect the relationship of GIC claimants with ASI Flex.
From Kollmeier, I learned that terms of service of claimant
interaction with ASI Flex are contained in the enrollment form. For example, the enrollment form for HCSA
accounts for new hires is, at the time of this writing, located on the state
website here,
The state also lists FSA FAQs here,
I note that here,
one can find various resources, including an FSA Appeal
Form,
ASI Flex also features various resources from its home page,
http://www.asiflex.com/, under the
“Resources” tab, including links to forms, FAQs, and a table of eligible
expenses.
The GIC was very accommodating in working with me to fulfill
my public record request. In partnership
with GIC counsel, I narrowed my request to procurement-related materials. I have reviewed all of the GIC documents, and
ASI Flex seems to have been retained according to an ordinary and lawful
process.
Most of the documents are routine forms, but I direct
interested persons to two documents of more substance, the “Bidder Q&A” and
“ASI Flex Plan Document.” In Bidder
Q&A, the GIC answered bidders’ questions about expectations for the FSA
program. The document provides some
commonsense guidance about how the FSA program is expected to work. The ASI Flex Plan Document lays out in terms
as specific as they get what program features ASI Flex promised to provide.
Two observations about the FSA program are made plain in
these documents and perhaps merit mention.
First, ASI Flex is paid wholly from the monthly administrative fees paid
by plan participants. There is no
payment for services from GIC to ASI Flex.
Second, funds forfeit from FSA users’ plans are returned to the GIC. The GIC uses those funds for plan
administration. Funds may be used to
balance accounts, for example, when an employee leaves midyear with paid claims
in excess of contributions to date. And
funds are used to support plan programming, such as breakfasts organized to
inform employees about FSA options. Both
of these arrangements in the GIC-ASI Flex program are, to my understanding,
typical of how FSA programs operate.
V. Conclusions
ASI Flex has, through our account manager, signaled a
willingness to meet our needs. But the
design of the service process bears serious deficiencies that render the very
value of the FSA program debatable for GIC participants. Some of these deficiencies derive from the
onerous limitations on FSA programs under federal law. But there remains within those constraints
ample room for ASI Flex and the GIC to improve the service experience for the
claimant-GIC participant, and indeed, to ensure that FSA participation is even
worth the effort, especially for users of the FSA Visa card.
With respect to the need for follow-up documentation on card
purchases, ASI Flex should streamline its claims process to reduce the
need. A hard constraint is the IRS
requirement that eligibility information be provided by a third party. But the IRS affords substantiation measures
to bypass this requirement, and ASI Flex uses bypasses with respect to some
co-pays. An automatic rule that every
submission must be supported by follow-up documentation unduly shifts ASI
Flex’s administrative burdens to the claimants, who pay for ASI Flex services.
ASI Flex has sufficiently lengthy experience with recurring
claims from recurring providers that alternative substantiation methods should
be feasible with some investment of effort.
Moreover, the point remains apt that the claimant, not ASI Flex,
principally bears the onus of audit. If
one provider offers all eligible services except for massage therapy, then a
claimant ought be permitted the opportunity simply to attest—by electronic
checkbox—that the service was not for massage therapy, rather than requiring every claimant to run ragged trying to
obtain additional information from that provider’s office about every transaction.
ASI Flex should also reach out to medical service providers
and work pro-actively to ensure that providers give their clients, in the first
live interaction, all of the written
documentation the clients need for claims.
A patient should never have to return to a doctor’s office to obtain
follow-up documentation required for an FSA claim, because of a missing date or
service description for examples, unless the patient herself or himself failed
to keep track of paperwork previously rendered.
Medical service providers and ASI Flex are both in the business of client
service. That client-claimants are stuck
in the middle, victimized by a twisted game of “Red Rover,” should be unacceptable
to the GIC.
With respect to the explanation of claim denials or
documentation rejections, ASI Flex and the GIC should ensure that every claim or
rejection is treated with individual care.
No denial or rejection should ever issue that does not specifically
state the reason for denial or rejection and provide the claimant with the full
array of redress options, including all avenues of communication, and how and
when to avail of them.
With respect to communication, ASI Flex should reexamine and
enhance its channels of communication with clients. At minimum, the Secure Message Center should
be a two-way avenue of communication, as is typical today in bank-client online
communication systems. Better would be a
live chat function, as is typically found on retailers’ website today. The hours of operation of the telephone line
should always accompany dissemination of the number. The ASI Flex email address should be on all
correspondence and on the client account website, and the email account should
be attentively responsive.
Since the federal government lowered the caps on FSA
set-asides, the efficacy of program participation for many claimants has become
dubious. That is the fault of neither
ASI Flex nor the GIC. However, ASI Flex
and the GIC together owe a duty to program participants to minimize the
transaction costs of program participation, including participants’ own time
and energies, so as to maximize the efficacy of participation. The bureaucratic design of the present
claims’ system seems better calculated to reduce transaction costs for ASI Flex
than for the customers who pay for ASI Flex’s services. The nature of complaints about those services
reveals a consistent and persistent focus on deficiencies in the follow-up
documentation process. Even within legal
constraints, there is ample room for ASI Flex to address those
deficiencies. Meanwhile the GIC should
be advocating transparently for the reasonable expectations of plan participants.
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