Hi,

My elf sorcerer character took the Acolyte origin feat and selected cure wounds as his first level spell. But after reaching 3rd level I do not see the spell as an option to be cast at a higher level. Does the 1st spells that you take through origin feats do not scale like their counterparts in dndbeyond?

Magic Initiate (the feat that Acolyte grants), does not scale the 1st level spell, cantrips automatically scale as per cantrip progression. Magic Initiate does prepare the spell, so if you have a higher level spell slot (from being a Cleric, Druid, Wizard, Sorcerer, Bard or Warlock for level 3) then you can cast the spell using a 2nd level slot but the casting from the daily free casting from the feat will remain 1st level.

Thanks! Sooo if I use a 3rd level sorcerer spell slot I can scale Cure Wounds as a 3 level spell, right? Or I have to always burn a 1st level sorcerer spell lot to cast it as a 1st level spell always?

You can cast it once for free (no spell slot) as a 1st level spell. If you want to upcast it, it will require using a spell slot. I am having the same issue with the upcast version not existing in the character builder. I think the builder can’t really distinguish between the free version or the higher level versions. So, when I cast at a higher level, or at 1st level after I’ve used my free one, I just tick the box for that level. 
I use physical dice, though, so it’s easier in that respect. I’m not sure what you’d do using digital dice.

Quote from Xalthu >>

You can cast it once for free (no spell slot) as a 1st level spell. If you want to upcast it, it will require using a spell slot. I am having the same issue with the upcast version not existing in the character builder. I think the builder can’t really distinguish between the free version or the higher level versions. So, when I cast at a higher level, or at 1st level after I’ve used my free one, I just tick the box for that level. 
I use physical dice, though, so it’s easier in that respect. I’m not sure what you’d do using digital dice.

 Thank you very much!

The system cannot, yet, have user-selected spells scale with spell slots when added through feats or items. So such feats would only add the "free cast" version with limited uses and if you want to cast with spell slots you'll need to roll manual dice and manually check off the spell slot.

Alternatively you can make a copy of your subclass and add a hidden feature to add a version of the spell that can use slots and be upscaled. I made a video using the Fey/Shadow touched feats as an example, the same method would apply to the new magic initiate: