Flexible Benefits
Jill Bachus, Director

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.

If you start to work after the enrollment period, you will have 30 days from your employment date to sign up for the Flexible Benefits Plan. Your personnel officer can assist you with this process. Enrollment of new employees after the Annual Enrollment/Transfer Period is over requires an Election Form to be submitted. Employees are not able to enroll or make changes to enrollment in Edison after the Annual Enrollment/Transfer Period.

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. When you incur medical expenses, submit them to your insurance provider or pay for them yourself if not covered by insurance. 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 (if covered by insurance), or your receipts (if not covered by insurance). You will then receive payment for the amount of your approved claimed expense, up to the amount you will contribute to your account during the year. Amounts paid to you through the reimbursement account will not be subject to income tax or social security tax.

There is no annual minimum contribution. The maximum amount you may contribute to the Medical Reimbursement Account is $7,500 per year.

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 almost all medical expenses incurred by you and your family that are not already covered by an insurance policy. While everyone has such 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, the costs of some elective procedures, and a host of 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 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 or exercise programs for services not related to a particular medical condition
• 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

Over-the-counter (OTC) medications have been approved by the IRS for use in the Flexible Benefits Plan. Basically, the medication must be specifically used for medical care. Items that promote good health in general, such as toothpaste and other toiletries, are not eligible for reimbursement.

Participants will be required to verify their expenses with a receipt that includes the name of the item purchased and date of purchase.

Click her to view some examples.