Insurance premium- denied for FSA- here's what they said

[mudnuri]

The HR lady I spoke with told me it's not a valid expense for a "RAP" account.

 

I politely told her that a RAP account is what they use to call the account, once our hospital was absorbed by the big hospital- they became FSA, as it is written all over our paperwork, our HR policy book, our HR policy website etc.

 

I advised her that I had printed off the part of publication 502, which states

 

"INSURANCE PREMIUM"

 

You can include in medical expenses insurance premiums you pay for policies that cover medical care. Medical care policies can provide payment for treatment that includes:

 

Hospilization, surgical services, xrays

prescription drugs and insulin

dental care,

replacement of lost or damaged contact lenses and LTC."

 

I pay for the girls insurance, through a program in our state, Catamount Heathcare is what it's called. It's a "low" income or uninsured program. Since the policy offered through my work place, is also owned by my workplace, i would have to go there for care...they are in Mass, I'm in VT.

 

So basically now I have to wait for the letter, denying it, and then I have to appeal it.

 

my question is, can an employer pick and chose what parts of the IRS expenses they allow for the FSA? i went round and round with her about bandaids last year, and won that.

 

Thanks

 

Brandy

[LBCS]

my question is, can an employer pick and chose what parts of the IRS expenses they allow for the FSA? i went round and round with her about bandaids last year, and won that.

 

They must just love you in HR.

[WBOTM]

mudnuri, did you figure out if you have an FSA (Flexible Spending Account), an HSA (Health Savings Account) or an older Archer MSA (Medical Savings Account)?

 

Some HSAs do not permit certain types of premiums as an allowable expense.

 

If you do have an FSA, all IRS permitted expenses should be allowed unless there is evidence you have already been reimbursed for those expenses.

[mudnuri]

The following quotes are directly copy/paste from my employers benefits page...

 

Health Care Reimbursement 76.93 999.98

that is from my online version of my paycheck- the pretax deduction part

 

Flexible Spending Accounts

Brandy ****

Your Flexible Spending Account(s) in 2009

 

this is on the page that tells me what I elected to put into my FSA

 

 

For this Plan Year you are enrolled in the Flexible Spending Account(s) listed below.

Please click on the one you wish to review.

again- same page as above

 

Flexible Spending Account Review

Brandy ***

Health Care Reimbursement

To review past benefits information, enter the year and click the Go button

again showing me what I picked

 

Now, from what they have all over my benefits page- its a FSA.........they can kiss my butt if they think I won't win this appeal.

 

I need to find WHERE it says- "the irs publication 502 is the law of FSA, you can't as an HR person, pick and chose what is eligible.."

 

Anyone?

[WBOTM]

mudnuri, thanks for clarifying.

 

IRS Publication 502 describes Medical and Dental Expenses (for tax deduction purposes for Schedule A) that are generally permitted under FSAs; however, there is another Publication for FSAs.

 

Have you looked at IRS Publication 969? This Publication covers HSAs, MSAs, FSAs and HRAs. See the link below:

 

http://www.irs.gov/publications/p969/ar02....ublink100038864

 

Note: Based on IRS Publication 969, your HR person may be correct.

 

Qualified medical expenses. Qualified medical expenses are those specified in the plan that would generally qualify for the medical and dental expenses deduction. These are explained in Publication 502, Medical and Dental Expenses. However, even though non-prescription medicines (other than insulin) do not qualify for the medical and dental expenses deduction, they do qualify as expenses for FSA purposes.

 

You cannot receive distributions from your FSA for the following expenses.

 

* Amounts paid for health insurance premiums.

 

* Amounts paid for long-term care coverage or expenses.

 

* Amounts that are covered under another health plan.

Edited July 4, 2009 by WBOTM

[mudnuri]

I guess I'm going to have to do some more research before making my case. they are complete opposites of one another (the 2 publications).

 

I know that insurance premiums are not allowed in HSA's....but FSA's it said in 502 they were.

 

Maybe if I called the IRS they could give me the real answer LOL.

 

Either way, it's not THAT much of a savings to get reimbursed by my FSA for it.

 

Thanks!

 

Brandy