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Medical Expense FSA - What Is It?

Guest post by: John Clark

Article Overview: Medical Expense FSA - What Is It?

Medical Expense FSA - What Is It?

The abbreviation FSA stands for Flexible Spending Account. A Medical Expense FSA is a type of account offered by some health insurance companies. This type of plan, also known as a medical FSA or health FSA, reimburse the account holder for expenses not covered by their medical insurance plan. What Does It Cover?

While the types of expenses covered vary from plan to plan, most will cover deductibles, copayments, dental or vision care expenses, and the cost of many over-the-counter medications. Any expense covered by a Medical Expense FSA must be intended to treat a specific medical condition. Therefore, the plans do not cover health insurance premiums, cosmetic surgery, or items designed to improve general health, like vitamin supplements.

How Does It Work?

Medical Expense FSAs are pre-funded; this means that the entire amount in the account is immediately available once the account is activated. A Medical Expense FSA is valid for one year; this year can be measured either by calendar year, or by the employee's health insurance plan year. First, the employee who is starting the account must elect how much money should be placed into the account. Then, in monthly installments, the employer will automatically deduct money from the employee's pre-tax earnings. If the employee does not spend all the money in the FSA by the end of the year, it is forfeited. Like health insurance, a Medical Expense FSA must be renewed each year. During the renewal period, the employee has the opportunity to change the amount of money placed into the account. Currently, maximum annual elections are limited to $5,000. Starting in 2012, maximum annual elections will be limited to $2,500.

How Do I Get Reimbursed?

Many Medical Expense FSAs currently offer debit cards to employees in order to simplify the reimbursement process. While the reimbursement process differs from plan to plan, all plans will require expenses to be substantiated before they are reimbursed. Generally, this will require providing an itemized receipt of the medical expenses to the company for approval. FSA debit cards simplify this process by allowing the expenses to be substantiated at the point-of-sale.

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Article Tags: fsa, medical expense
Referred by: http://www.franchisefix.com/



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