Alright, I have a beef about medical flexible spending accounts.

[LuckyCharms]

I've spent 4 hours in the past few days trying to get this straightened out.

Briefly:

1) Flexible medical spending accounts are where money is taken out of your paycheck, and put into a fund. The money that is taken out reduces your gross income, and therefore your income tax liability.

2) As you incur IRS approved medical expenses, you submit the receipt to the company that administrates the flex plan. The administrator then reimburses you the amount you paid for the medical expense, and then reduces the amount of money you have remaining in your fund.

3) Since the money that you contribute to the fund reduces your taxable income, the IRS has rules about what medical expenses the fund can reimburse.

4) Medical co-pays are an allowable expense per the IRS.

5) I have submitted receipts for co-pays to the plan for years, and they have always been reimbursed quickly. The receipts submitted simply say "co-pay".

6) My latest co-pay submission was denied. The reason? The administrator is telling me the receipt has to say what the co-pay is for.

7) I have conveyed to the customer service rep that she is incorrect because:

a) The receipt has all of the required provider information and says "co-pay" on it.

b) They have approved at least 50 of these similar co-pays before, with the same receipt format.

c) Any further information besides the word "co-pay" would naturally have to reveal HIPAA sensitive diagnoses, procedures, and tests performed. That information is protected, and it is not the administrator's, nor the IRS's business.

d) When I submit an online reimbursement form, there are two drop down boxes that are answered as follows: 1) medical reimbursement, and 2) Co-pay. No other choices apply in my case.

e) The administrator told me that they will approve this co-pay this one time as a "courtesy". I told them that if they actually believe the expense is unallowable, then a "courtesy" breaks the goddamn law and they should know better. So, they are incorrect, inconsistent lawbreakers. Keep in mind that this is my OWN MONEY that I am getting paid, and also, I know the IRS requirements for this 100%.

I keep kicking this problem up to the next layer of supervision. This is just another hassle, on top of regular insurance company hassles, that accompany our "health care system". They need to string up the geniuses who think that insurance companies and flex plan administrators, etc. add one ounce of value to this fucked up system we have.

[brooklynite]

1. Can I observe that your issue is not with "flexible spending accounts"; it's with your FSP?

I've never had a problem getting reimbursements through mine.

FWIW - does your FSP issues a debit card? If you, you can pay the bill directly with FSP funds.

[LuckyCharms]

2. I've tried to use the debit card for...

co-pays at the doctor's office, The charge goes through, but I get a letter a week later from the plan administrator stating that they need an actual receipt. As a result, they only seem to accept the debit card for prescriptions which are direct billed by the pharmacy, and for nothing else. Everything else requires receipt submittal.

My problem is both with the plan, and the plan administrator. It is a convoluted system that puts a band-aid on the real problem of how patients are to pay for their health care. Sure, it's nice to have, but the bottom line is that you are jumping through hoops to get your own money back, so you can save a small percentage (your effective tax rate) on your health care costs. It's complete bullshit.

[Ms. Toad]

6. Your primary problem is with your plan administrator.

I've had at least 5. The most recent one is horrendous - I have claims rejected right and left - especially at the beginning of the year when we pay bills that they perceive might be for the prior year. But I've had a grand total of perhaps 2 that required additional documentation in all 4 prior plan administrators. So the hassles you are experiencing are plan administrator specific.

But FSAs are not an attempt to fix health care. They allow people who don't have enough medical expenses to itemize to accomplish equivalent tax benefits. That's all. If it's too much hassle - just like itemizing medical deductions might be - just don't take use it.

[PoindexterOglethorpe]

3. The co-pay could say

something like "co-pay for blood test" which would hardly violate HIPPA.

Although I am with you that if they've been reimbursing the co-pays without any other information, there's no reason for this sudden change.

[LuckyCharms]

9. That would be great if the receipt did indeed have a description like that.

But here's the problem.

Not all, but the majority of my providers are housed at the same hospital complex, so they all use the same software to generate their receipts, etc.

Their system is not set up to provide a description that links the word co-pay to a specific service. So what you see is what you get. I guess I could have someone there stamp or sign it with an added description, but that would probably be denied as well.

I have three problems with all of this:

1) I used to manage a company that administered flex plans, among other things. These "analysts" are simply people who sit at a desk and compare a receipt to IRS guidelines. There is absolutely no common sense applied with some administrators. I was told today that the reason they need to see what the co-pay is for is to make sure it is not for cosmetic purposes. Well, why would a kidney doctor have cosmetic procedures? A cardiologist? A urologist? I guess it is possible. Maybe someone has a benign growth on their genitals or something and they want it removed simply because it looks bad. But Jesus, how often is that going to happen?

2) I was told today that the reason receipts that simply say "co-pay" were approved previously was because of "training issues". FOUR PREVIOUS YEARS OF "TRAINING ISSUES"??? Also, they offer me a one time "courtesy" of approving the charge when they are making a case that it is not supported with the receipt? Nuh uh...against the law. For these two reasons, I'm so pissed that I'm half inclined to blow the whistle on these people to the IRS.

3) My third issue is my problem, because I'm kicking myself for ever signing up for this horseshit. Reason being...the benefit is not worth the aggravation. These are not my numbers, but I will use them as an example. An individual has an EFFECTIVE tax rate of 10%. They contribute $2,500 to a flex plan. The result is that they will save $250 in income taxes. A few hundred dollars is not worth this forehead vessel popping stress and aggravation. Next year I'll just skip the flex plan.

[PoindexterOglethorpe]

12. A long time ago my husband had a job with a flex pay plan for medical expenses.

What I heartily disliked about it was that you set aside the money and yeah there was a tax deduction, but if you didn't use all the money you simply lost it.

When the boys were going through braces it was nice, but after braces were done with, I had my husband cut that plan amount way down, because it simply wasn't possible to anticipate very many medical expenses, given that none of us had a chronic disease or condition that required regular medical care.

Again, this was about 25 years ago, and I will say that I never ran into a problem with getting the money turned over to us. I believe it was something his company did, not some plan administrator. Again, it was a long time ago, very possibly a different kind of plan and probably different rules in effect.

I really hope you can get this resolved. And I agree that the aggravation may not be worth it.

[area51]

4. This is one of the many reasons why we need

comprehensive Medicare for All.

[customerserviceguy]

5. I hate flexible spending accounts

but I like my health savings account. The difference? My HSA administrator doesn't expect to keep a dime of the money I have in there, so does not fight me for it when I go to use it. An FSA account administrator gets to keep anything you neglect to draw out of the account after a certain period is up. Therefore, they have an incentive to deny your claim on YOUR OWN DAMNED MONEY.

They think it's their money.

[Wiseman32218]

7. I was a CSR for a FSP

We were one of the companies that demanded receipts for everything, total PITA. Several clients would complain about our "requirements" regarding documentation. We were told to hold firm on that policy. Many got fed up with the company and recommended their employer switch to a different provider.

The company I worked for sucked, they fired me for being on Short-term disability while recovering from a stroke I had at there facility, unbelievable.

[LuckyCharms]

10. Some of these companies have such a fear of audits...

that they stick to the letter of the regulation without applying any common sense.

Co-pay for a cardiologist? You need to prove it was not for an unallowable cosmetic procedure. WTF? Auditors (I used to be one) are able to apply reasonableness and materiality to transactions to determine whether or not to flag a transaction as being non-compliant. There is no way a good auditor would give a company any shit about a receipt that simply says co-pay from say... a cardiologist. A dermatologist would be a different story.

I'm sorry they fired you. Such a shitty thing for them to do. I hope you are doing well now.

[Igel]

8. Mine had the rules change.

They used to be lenient. Don't know what happened, but now they require an explanation of benefits (EOB) for nearly everything. You can sometimes get that from your service provider, sometimes it needs to come from your insurance company. Which you need rather depends on whether insurance paid for any of it or not.

Which reminds me, it's time to pull all that stuff together and send it in.

[LuckyCharms]

11. I'm going to have to submit both an EOB AND a paid receipt...

because the EOB, while more detailed, only says "patient responsibility" and does not indicate whether the patient ultimately paid it or not.

Pain in the ass! Just to get your own money back!

[Lars39]

14. That's ridiculous!

The EOB should be sufficient. Just incurring the patient liability is enough for reimbursement with our plan. Is there a state agency that regulates FLEX plans or is it totally with the IRS?

[LuckyCharms]

15. That's a good question. I'm not sure.

[alphafemale]

13. I have a HSA and debit card.

Never had a problem.

But I rarely use it anyway.

Just bought contacts.

This is my banked money, dammit.

They better not try me.

[GulfCoast66]

16. Used to have a FSA. Hated it for all the reasons you state.

Now I have a HSA and it is the best thing ever.

Can put in a couple thousand a year, tax free, and it is mine forever. I am actually using it to save money for either a really bad illness, or if unneeded to pay for medical expenses not covered by Medicare in retirement.