FSA reimbursements

[Guest ElKH]

I had a medical reimbursement form returned to me because I had submitted a photocopy of the bill rather than a receipt for payment.

I was told that I need to provide proof that the bill was paid. I pay my bills by mail. So, the administrator said photocopy the cancelled check.

Is this for real!?!

[Guest JerseyGirl]

The IRS only requires that the services be rendered, and proper documentation be provided to back that up, although years ago they did require payment before reimbursement was allowed. Your plan may contain language that is much more restrictive then current regulations dictate, which is completely up to the plan sponsor, and allowable by law.

Check the SPD (Summary Plan Description) for your specific plan; a copy of which should have been given to you at the start of the plan year. If the services must be paid for before you can receive a reimbursement, it should be clearly stated within the plan documents.

Ironically, the IRS does not accept a cancelled check (or credit card receipt) as sufficient documentation-- they require a copy of the original bill, or some other proof of the treatment having been rendered!

[g8r]

I can't confirm whether the IRS will accept a photocopy or not. But, since the IRS isn't auditing cafeteria plans, it would seem the most likely place this would come up is on an audit of an individual's tax return. And, unlike a health FSA, for deduction purposes it's based on when the expenses are paid, not incurred.

[KIP KRAUS]

The rational behind requiring an original bill is that originals can be doctored up to put by putting higher expenses on the bill and then photo copying it. Keep a photocopy for your records and send in the original.

[Guest JerseyGirl]

To KIP KRAUS and g8r:

Aren't you both getting just a wee bit off track? ElKH didn't inquire about the validity of a photo copy vs. the original bill in the eyes of the IRS, but what is the proper procedure for getting approval of a claim for reimbursement from his FSA. That, my friends, is determined by what is stated in his plan document.

Here is what would be required for claims adjudication at the TPA firm I work for ( this is, of course, assuming the expense is eligible and was incurred during the plan year): an EOB from your health insurance carrier showing what portion of the procedure is the patient's responsability; OR an itemized bill from the third-party who rendered the services ( i.e. doctor's office); OR, if the claim is for an office visit co-pay, a receipt showing payment of said co-pay.

All of the above documentation MUST INCLUDE: Service provider's name, patient's name, date of service and what the charges represent ( listing of treatment provided or co-pay). A *balance forward* type of statement is not enough.

If the claim is for reimbursement of prescriptions purchased, we require the pharmacy name, patient name, and proof of the out-of-pocket expense ( most phramacies provide all of this on every receipt).

We do not accept cancelled checks or credit card receipts alone--without one of the above-- as proper documentation.

Hope you've gotten the information you were looking for ElKH!!

[Guest ElKH]

Yes thanks! I will be looking through the Plan Document. Honestly, I hope it's in my favor. I just don't want to have to jump through hoops every time we incur a medical expense.

[KIP KRAUS]

JerseyGirl

You must not have read my post accurately. I was merely explaining the rational behind requiring an original bill for reimbursement. I wasn’t assuming anything about EIKH’s plan provisions.

[GBurns]

Jersey Girl

The original post by EIKH states that he had "a medical reimbursement form returned to me because I had submitted a photocopy of the bill rather than a receipt for payment". According to his post it was the absence of a receipt that was the problem. This was further evidenced by his later statement " I was told that I need to provide proof that the bill was paid".

You stated that what would be required at yout TPA firm would be "an EOB from your health insurance carrier showing what portion of the procedure is the patient's responsability; OR an itemized bill from the third-party who rendered the services ( i.e. doctor's office); OR, if the claim is for an office visit co-pay, a receipt showing payment of said co-pay."

According to your post, your TPA firm only recognizes incurred expenses as being reimburseable except when an office visit co-pay or prescriptions are involved, for which you require a receipt for payment.

Why would you not requirement for payment for some but incurred for others?

EIKH

I think that you need to find out exactly what language your SPD and Plan Document uses to determine whether reimbursement is based on "incurred" or "paid". "incurred" requires proof of service but not necessarily payment, whereas "paid" requires both. This should determine what you ahve to do each time and not be subject to anyone's whims or fancies of interpretation.

[Guest JerseyGirl]

GBurns,

If your health insurance is an HMO, you will not get an EOB for a simple office visit to your doctor, but in most cases will stand at the receptionist's counter and pay your $10, $15, whatever, office visit co-pay at the time of service. By requesting a receipt for that co-payment,and making sure it has all the pertinent info on it (Dr's name, your name, date, amount paid and the word *co-pay*), you then have the proper documentation to submit for reimbursement.

Similar situation at the pharmacy-- you won't be getting an EOB or a bill, but they will be providing a very complete receipt-- usually stapled rather conveniently right to the outside of the bag.

Were large procedures, lab work or hospital stays are involved, it's a crapshoot to know what, if anything, the insurance carrier will be paying. Then there are charges the hospital will write off because they are in excess of the arrangement between the carrier and the hospital, and most hospitals don't expect you to pay your co-pay at the door. They will bill your insurance first, and then send the patient a bill for the balance. In those cases, that would be the time for one of our participants to submit a claim with either the EOB from the insurance carrier or the itemized bill from the hospital (lab,etc) which clearly states the remaining portion of the bill that is the patient's responsability.

It's our responsability to adjudicate claims in a timely, efficient and IRS audit-ready manner, not hassle the participants, force them to jump thru a ridiculous number of unnecessary hoops or keep them seperated from their own funds.

If you have any suggestion on ways to improve or streamline this procedure, I'm all ears!

In the case of the question posted here by ElKH, as you have also stated, it's all about the language in the plan documents!! I was trying to provide some insight for ElKH on how other organizations process claims.

[Sandra Pearce]

In many cases an employee will attempt to file a statement from a provider instead of a copy of an EOB, receipt, etc. In most cases a billing statement does not include the date of service or the specific service rendered making it impossible to properly consider the claim.

[Guest JerseyGirl]

Unfortunately, this is true. A *balance forward* statement doesn't cut it for documentation for the reasons you have stated, but people will submit them anyway.

This is where education and communication are key factors. If the participant is given detailed information on how to properly file a reimbursement claim at the beginning of the plan year, whether it's in the form of a detailed claims kit, website, or at the open enrollment meeting, claims adjudication is so much simpler.

At times, especially if it is the first time a participant has filed a claim, I will send them an e-mail (rather than just processing the claim, denying it and sending out a negative EOB)letting them know the documentation they provided will not be sufficient to get their claim approved. I tell them exactly what else is needed. In most cases, the additional information will arrive later that same day, and the claim is approved.