Monthly Reimbursement of Orthodontic Expenses from Health FSA

[Guest Manderson]

In a medical spending account, does an employee need to submit a monthly claim for reimbursement if their dependent is in the middle of orthodontic treatment? I have a third party administrator tellling me that if I submit a copy of the ortho treatment plan, payment arrangement I have with the orthodontist and complete a request for continual reimbursement claim form, I do not have to submit this claim for reimbursement on a monthly basis. Under this plan, I will receive reimbursement every month (checks are cut once a month).

Is this permissible under Section 125?

Thanks

[Guest JerseyGirl]

If I am reading your post correctly, if you were to submit a continual reimbursement, you would in essence be requesting reimbursement before the service is actually rendered. I do not believe this would stand up to an IRS audit.

I would recommend playing it safe, submit a claim each month for one months worth of treatment and expense and include a copy of the treatment plan with each claim as back-up documentation. I know this creates a small amount of additional work each month, but it also keeps you and the plan as a whole in compliance.

[Kirk Maldonado]

You might find the information in this thread useful:

http://www.benefitslink.com/boards/index.p...t=0entry58052

[Guest tintree73]

This also might help: http://www.ebia.com/weekly/articles/2001/C...HarryBeker.html

[GBurns]

If the dependent has these scheduled appointments for service set, for example, on the 14th of every month, and the claims administrator only reimburses at the end of the month, the reimbursement would be AFTER the service related to that reimbursement has been rendered. In fact, I cannot think of it being any other way unless an appointment is not kept and no service rendered in a particular month.

As far as compliance and IRS audits go, this should not be an issue. The Treas Regs only require that the expense be incurred not that it be paid. the expense is usually incurred when the service is rendered. If the appointments are kept, then the service would have been rendered BEFORE the reimbursement.