standard copayment amounts for that plan. If the charge is exactly equal to between one and five of those copayment amounts, it may be auto-adjudicated and approved without receipts. If the health plan has different copayment amounts for a particular type of charge, any valid combination of copayment amounts may be approved, up to five times the highest possible copayment amount. Also, charges may be auto-adjudicated if they are accompanied by electronic information substantiating that the charge is for medical purposes. This may be done through such means as including details of the transaction with the charge (Ruling 2003-43) or forwarding the health plan's explanation of benefits to the FSA or HRA provider for further processing (Notice 2006-69). Under Notice 2006-69, all charges from a merchant with an IIAS may also be auto-adjudicated; however, beginning in 2007 the merchant must make available to the employer the detailed records of all such transactions for IRS review. This may be done either automatically or in response to an IRS audit of the employer. If the charge is not substantiated by auto-adjudication or receipts, the FSA or HRA provider must recoup the charge and suspend the card until it is recouped. In addition to voluntary methods of recoupment, employers commonly use payroll deduction, as well as offsetting the recoupment against future paper claims. If all else fails, the employer may add the amount of the charge to the employee's W-2 as taxable income. References IRS Revenue Ruling 2003-43 IRS Notice 2006-69 IRS Notice 2007-02 SIGIS - Special Interest Group for IIAS Most published information on FSA debit cards (other than from the IRS) is found on the websites of FSA vendors: AmeriFlex myCafeteriaPlan BenefitsWorkshop Benefits Card Debit cards