Pre-payment for dental services

[Guest moseelig]

I'm not sure how to handle this situation, any thoughts? On 2/12/07 a participant paid for dental services for which she did not actually incur until 3/5/07; however, she terminated her employment (no COBRA) on 2/16/07. Should i reimburse? Thank you.

[papogi]

I wouldn't. Only in the case of orthodontics (due to the high dollar nature and lengthy treatment plans) has the IRS made any "exceptions" to the fundamental rule that services must actually be rendered before reimbursement can occur. In those cases, pre-payment of ortho expenses can be reimbursed if a Plan chooses to allow it. I think your situation is one where the claim should be denied.