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Healthcare Reimbursement

A Health Care Reimbursement Account reimburses you for health care expenses not covered or only partly covered by your medical and dental plans. In addition to claiming uninsured expenses for your own medical care, you can claim expenses for someone the IRS recognized as your eligible dependent, even if that person is not covered under your medical plan. You may be reimbursed for uninsured dental expenses, even if you do not carry dental coverage.

The Health Care Reimbursement Account is authorized by the IRS. The account is designed to help you save taxes on eligible expenses incurred during the year. The amount you contribute to the account will be deducted from each paycheck on a pre-tax basis.

This is generally how you use your Health Care Reimbursement Account:
You have until April to submit claims for expenses incurred during the prior plan year. Remember that the cost of a service is incurred when it is received. All expenses are reimbursed based on the date that the service is received, not based on when you are billed or when you pay for the service.

Special Rules for Divorced Parents
Special rules apply if you and your spouse are divorced or legally separated, or if you have lived apart at all times during the last six months of the tax year. Either parent is eligible to be reimbursed for a child’s health care expenses through the Health Care Reimbursement Account if the child receives over one-half of his or her support from one or both parents and is in the custody of one or both parents for more than one-half of the tax year.

To participate in a Health Care Reimbursement Account, you must:

  • be a regular employee and have been employed at least one year as of January 1 of the current year
  • carry at least individual health coverage through Erlanger.

The maximum amount which may be reimbursed in a plan year is $2,002.

Reimbursable Expenses
Expenses that can be reimbursed through a Health Care Reimbursement Account are those expenses that are not covered by your health insurance plan(s) and are allowed by the IRS as a tax-deductible medical expense on your Federal income tax return. Such expenses include:

  • Health insurance deductibles and co-pays
  • Health care co-insurance cost
  • Dental insurance deductibles
  • Dental care co-insurance cost
  • Routine medical exams
  • Physicians’ fees
  • Psychologists’ fees
  • Prescribed medications
  • Eye glasses and contact lenses
  • Contact lens solution
  • Insulin
  • Artificial limbs
  • Crutches
  • Wheel Chairs
  • Special equipment (e.g., telephone equipment for the deaf)

All expenses listed above must first be filed with your insurance provider(s), except for vision care.
Note: Only those medical expenses that are specifically allowed by IRC section 213 are eligible.

Non-reimbursable Expenses
Expenses not eligible for reimbursement through you Health Care Reimbursement Account include:

  • Programs to stop smoking (no exceptions)
  • Weight loss programs (no exceptions)
  • Non prescription or over-the-counter drugs, such as aspirin
  • Cosmetic surgery or cosmetic procedures
  • Any medical or dental procedure that is not medically necessary
  • Electrolysis
  • Health insurance premiums
  • Diaper service
  • Funeral and burial expenses
  • Health club dues
  • Household help
  • Maternity clothes
  • Illegal operations and treatment
  • Expenses for trips even if for general health improvement
  • Cost of exercise classes even if recommended by your doctor
  • Toothpaste, cosmetics, or toiletries

Planning for a Reimbursement Account
Estimate the amount you will spend on eligible expenses during the coming year. Then, decide how much to contribute into each account. Your contributions to the Health Care Reimbursement Accounts are deducted from your paycheck in equal amounts, divided over 26 pay periods. Money cannot be transferred from the Health Care Reimbursement Account to the Dependent Care Reimbursement Account or from the Dependent Care Reimbursement Account to the Health Care Reimbursement Account. You will want to plan your deposits carefully and conservatively. If you have money left in the account after you have submitted all your claims for the year, you will lose the remaining money according to IRS rules.

Changing Your Election
You may change your reimbursement account election only if you notify Human Resources within 30 days of a qualifying change in family status, which includes:

  • Marriage
  • Divorce
  • Birth of child
  • Death of dependent
  • Change in your employment status
  • Beginning or termination of your spouse’s employment, significant changes in your spouse’s health care plan. (You cannot change your election if you simply decide you can’t afford the deductions or have an unforeseen expense.)

Requesting Reimbursement
You may request to be reimbursed only after a service has been rendered. With your Health Care Reimbursement Account, you may be reimbursed up to the total amount of your annual contribution – even before that amount has accumulated in your account.
For Health Care Reimbursement Account claims, you will need to provide copies of explanations of benefits (EOBs) from your insurance provider(s) to be reimbursed for uninsured medical and dental expenses. Invoices or receipts are acceptable only for expenses that are clearly not covered by our medical or dental plan, such as vision care and adult orthodontia.