The Medical Expense Reimbursement Account is one of the tax saving options available to state employees through the Flexible Benefits Plan. The Medical Expense Reimbursement Account is generally beneficial to anyone who has predictable out-of-pocket medical expenses.
Enrollment into one or all of the tax free reimbursement accounts is done each year during the Annual Enrollment/Transfer Period through Edison Employee Self-Service.
The effective coverage date for the FSA program is the first day of the month following one full calendar month of employment. For example, if hire date is 8/2, coverage begins 10/1. Expenses incurred prior to the coverage begin date are not eligible for reimbursement. Your personnel officer can assist you with this process. Enrollment of new employees after the Annual Enrollment/Transfer Period is over requires enrollment in Edison. Employees are not able to enroll or make changes to enrollment in Edison after the Annual Enrollment/Transfer Period.
Please note, the medical Flexible Benefits accounts are not health savings accounts. Flex medical accounts are subject to the "use it or lose it" rule, and unused funds are forfeited from year to year. All expenses must be incurred by March 15 and filed for reimbursement by March 31 for the prior calendar year to avoid forfeitures of funds.
Estimate your out-of-pocket medical expenses for the upcoming plan year. Using these calculations, decide how much to place in your account. Be certain the amount is realistic.
Be sure to save the Explanation of Benefits you receive from your insurance provider and/or the receipts for out-of-pocket medical expenses you incur. Submit Reimbursement Request Forms to the Flexible Benefits Office along with either your Explanation of Benefits or your receipts. You will then receive payment for the amount of your approved claimed expense (as long as the claims do not exceed the amount you will contribute for the year). Amounts paid to you through the reimbursement account will not be subject to income tax or social security tax.
There is currently no annual minimum contribution. The maximum amount you may contribute to the Medical Reimbursement Account is $2,550.00 per year. Future limits will be tied to increases in the Consumer Price Index (CPI).
As a general rule, any categories of expenses that could be deducted on an IRS Form 1040 for medical expenses, except insurance premiums, can be paid for with pre-tax dollars through the Medical Expense Reimbursement Account.
The Medical Expense Reimbursement Account allows you to use tax-free money to pay for many medical expenses incurred by you and your family. While everyone has medical expenses, the attractiveness of the reimbursement account depends upon the amount of such expenses you and your dependents pay out-of-pocket each year.
You may use the account to pay your co-payments and deductible amounts on dental and vision care not covered by insurance, prescription drugs, and many other expenses, some of which are shown by clicking here.
A complete list is available in IRS Publication 502. Click here to access the IRS site to print this publication. The following items are examples of some expenses not eligible for reimbursement under the Medical Expense Reimbursement Account:
- Premiums for health insurance coverage such as major medical, dental, vision, and cancer
- Health club dues, personal trainer fees, gym memberships, or spa fees
- Nonessential cosmetic surgery
- Premiums for life, accidental death, disability, or hospital indemnity insurance
- Diaper service
- Funeral expenses
- Household help
- Advance reimbursement of future or projected medical expenses
- Expenses incurred in a prior plan year and paid during the current plan year
- Medical expenses claimed on your tax return
- Marriage and family counseling
*Important change due to the Patient Protection and Affordable Care Act (PPACA) for Plan Year 2011 forward*
Effective January 1, 2011 over-the-counter drugs are no longer reimbursable under
the health flexible spending account (FSA), unless the drugs are prescribed by a physician.
Participants will be required to verify their expenses with a receipt that includes the name
of the item purchased and date of purchase along with the applicable prescription.
Click here to view some examples.