Fsa

[Guest susanyb]

We have an associate that had the impression for a dental crown done in December 2000 but the crown wasn't seated until January 2001. She is wanting to claim the expense for 2001 health care reimbursement.

The dental insurance paid the claim in December 2000. Should she be allowed to claim this expense because the service was not completed until 2001?

[papogi]

I am of the opinion that the January 2001 expense should be paid out of her 2001 HCFSA, but the 2000 portion should be paid out of her 2000 account. The IRS states that an expense is incurred whe the care is provided, not when the individual is billed or pays for the services. As an example, orthodontia expenses typically span over more than one year, and the correct procedure is to obtain a schedule of allocated payments to be certain what the dates of service are , and what the related charges are. I would think that the IRS would apply the same reasoning in this particular case. The services began in a previous year, but there are specific charges related to the 2000 services and the 2001 services, and they should be separated.

[Guest susanyb]

Are you saying I should divide the cost in 1/2 and allow 1/2 for 2001?

[papogi]

I would push back to the employee to see if a statement from the dentist can be obtained that at least estimates what the 2000 charges were, and what the 2001 charges were. The dentist should have some idea as to the level of complexity of the two visits, and how to prorate the charges. In my experience, explaining to a provider the need for such a breakdown for FSA purposes is enough to get something usable. In the face of an IRS audit, it could be proven that reasonable effort was taken to substantiate the claim.

[Guest MSMA]

Here I go again...

When paying claims, we usually only require one form of third party documentation for the claim. If the dental insurer Explanation of Benefits indicates a date-of-service in 2000 we would regard that as the necessary documentation.

In my personal experience dental offices are very reluctant to break out the services. If you are succesful in this endeavor, consider yourself lucky...ESPECIALLY in the case of orthodonture. As long as they have a payment plan with the patient, that's all they feel obligated to provide.

However, if the dental provider billed the services out to the insurer with a 2000 date-of-service, then I can not see how he could LEGALLY break out the charges for two different years just to meet the the patient's financial needs.

Hope I didn't confuse the issue for you!

[Guest susanyb]

I just got off the phone with the dentist's office. They are adamant that this is one procedure that simply requires two visits to complete. They cannot break down the procedure for the impression as one service and then the seating of the crown as another service. Additionally they told me that our assoicate had 2 missed appointments in December.

I guess our associate is out of luck.

Thanks to everyone for your advice!

[mroberts]

If you check out your dental booklet certificate, it should indicate when a procedure is deemed completed. For example, any time you are talking about prosthetic devices (crowns) or bridges it's usually on the date the service was completed.

However, in your employee's situation, it appears that the dental carrier deemed the procedure completed as of the date of the impression. You may want to double check your booklet/policy just to make sure it was billed properly. The employee might have cancelled the appointments in December so that she could claim the expenses in 2001.

[GBurns]

susanyb,

Why would you say that the employee is out of luck? From the responses given it seems 50-50, but the fact that the insurance company deemed it to be a 2000 procedure thereby making the co-pay a 2000 item, seems to be the swing vote in favor of the employee.

I consider this to be not too different from the Grande V. Allison Engine case. The expense was incurred in 200 but the service was not completed until 2001, however it is the incurred that counts not the payment or the conclusion of the service.

[Guest susanyb]

I said this employee was out of luck because they were trying to claim it as a 2001 HCRA expense when the dental insurance company clearly said that the service occurred in December of 2000.

[GBurns]

What is the difference between this case and Grande V. Allison?

www.ebia.com/weekly/articles/2000/Caf000831Grande.html

[GBurns]

I have had a few emails requesting a link to the actual case, since the link in the above cite no longer links to the case. You can find the case itself here:

http://www.insd.uscourts.gov/search_opinions.htm

[Guest M L Sullivan]

I just had a crown and your associate should have done some homework first. I asked my dentist specifically how this would work for me (under my FSA Plan) since I had three visits to get the job done, one visit in 2001 and two visits in 2002. He said that because the final actual crown was not put on until 2002, he would date and bill the entire procedure in 2002. In fact, he asked me what worked best for me - he could do it in 2001 or 2002. I hope when I get the bill it works out!

[GBurns]

I hope it works out for you, but I have to wonder why you would seek advice on your FSA from a dentist rather than the Plan Administrator? Does your dentist have special knowledge of FSAs in general and your FSA in particular?