Health Reimbursement Accounts

[rlb64]

Prior to termination from employment, I submitted outstanding reimbursable health expenses to my employer for reimbursement. However, they only reimbursed me for a pro-rata portion of the elected annual dollar amount as of date of termination. To simplify, my total elected amount, some of which is covered by employer contributions, was $1000; but they only permitted reimbursement of approximately $500 (the amount deposited to "my account" as of date of termination).

Is this correct? If not, do you have a reference or regulation?

[Guest CoreDocuments.com]

I write HRA plan documents and am Certified in Flexible Compensation. Normally, an HRA Deductible Gap arrangement would not accumulate the annual benefit on a monthly basis. Normally the type of HRA you are participating in would credit the lump sum at the beginning of the plan year.

In a Comprehensive HRA where the employer is simply providing X amount of dollars on a monthly basis your claim situation would be normal, and expected.

First, I would look at the Summary Plan Description and see if the funding option is listed there. If not, or if they never provided you with an SPD,(which is not unusual), I would advise asking for a copy of the actual plan document and see how the plan was set up.

Gene Ennis, CFC

www.CoreDocuments.com

[Ron Snyder]

The reimbursement may be pro-rated monthly, may be limited to actual contributions made with no recourse against the company, etc. Your can only find the answer by reading the plan documents and the SPD. Other documents are not relevant.

[GBurns]

rlb64

You posted this as an HRA question, but yet you state that you contributed through an election to this account. Are you sure that you mean HRA and not FSA?

I also do not understand "my total elected amount, some of which is covered by employer contributions" . An employee cannot contribute to an HRA but both the employee and the employer can contribute to an FSA. The employee election is done through a Salary Reduction Agreement and then deposited to the FSA account. The entire amount of the annual "total" for the FSA must be available to reimburse submitted eligible expenses immediately and is not dependent on the amount "deposited" to the FSA account. An FSA is therefore not prorated.

The issues, however, depend on what you really mean and have.

I also have yet to see or hear of an HRA that credits the employer "pledge" in a lump sum at the start of the year. They either credit monthly or as expenses occur.

[rlb64]

I'll have to request a copy of the SPD. I don't believe I have it anymore which I realize wasn't very smart.

I'm not sure if I labeled the plan correctly. It's a section 125 plan that makes available a fixed annual employer amount plus an additional employee elected amount prorated throughout the year from each pay. As I incur health, eye, or dental expenses, I submit for reimbursement against the account (which allows for payment on a pre-tax basis).

I was always under the impression that the participant can seek reimbursement under these plans for the full annual amount at any time during the year. For example, if an expense totalling the full amount occurred the beginning of the plan year, that full amount is reimbursable.

This account is definitely not a health savings account for a high deductible health care plan.

[Guest marjbarge]

Hi All: I have created a problem. Please help! I elected to have $20.00 taken from each paycheck to fund an FSA (not restricted to dental, vision etc). Meanwhile (effective 5/1/14), I chose a High Deductible (HSA eligible) insurance policy from the Affordable Care Act marketplace. After all this was complete (and undoable) I found research saying I cannot have both plans at the same time. It seems I cannot stop my FSA contribution because I have not encountered an eligible "Change in Status" which is limited to marital status, # of dependents, employment status etc. I cannot change the type of insurance policy I have-I already checked and was told "no". How can I get out of the FSA so I can fund my HSA account? What is the penalty if I set aside and spend $520 in my FSA and fund my HSA (likely by not more than $2,000). Thanks so much. Marjorie

[Clarifying Health]

To confirm with other answers, look in your plan documents or SPD. Reimbursement plans can be set up differently from employer to employer. For example, if you are being offered a Health Reimbursement Arrangement, and you receive allowance amounts monthly, then it could be correct that you received just a pro-rated amount. However, if you receive an annual allowance, then you would have full use of the balance from the beginning of the year. Does that make sense?