OK - so my husband had a vasectomy in February. We increased the amount we were going to contribute to our flexible spending account because we contacted Dr & insurance to determine final price: $1800.
After the surgery we got a bill for about that amount, so I submitted the bill to my FSA and they cut me a check for just under $2000.
This week I got an ADJUSTED statement stating that because of whatever they can't charge MORE than the allowable whatever, so the final price that we would pay was REDUCED to $1100. Fine, I get that. I don't speak insurance, but I understand about allowable amounts and whatnot.
However - I submitted a bill to the FSA for the originally amount that is now, technically, MORE than the actual final bill. By. A. Lot. - like $900. So I called the Dr to make sure and she said, "yep you only owe $1100". Then I called the FSA account and explained to them that there was an adjustment and she looked up the transaction and said "this is a legitimate receipt, so you are fine".
This seems like fraud, right?
The bummer is that I inflated the amount we would contribute at the beginning of the year based on the expected charge. So, I would probably lose that $900 if I had to give it back to the FSA. Especially because there are NO OTC expenses eligible anymore. So, I would really like to keep the money.
But - it seems dishonest. Except that I called to check, and the FSA people said it was fine.
Any insurance savvy mamas know what to do?
It's your money in the first place. You submitted the "correct" bill at the time. It was in good faith. You got reimbursed appropriately. And, again, remember, it was YOUR money in the first place. You did everything by the book, as did they. I wouldn't worry about it at all.
A couple things: The first eob you submitted to FSA that was reimbursed was a legitimate receipt so yes you can keep that money. It's not fraud.
The rules for OTC reimbursement has changed. In the past you could submit just about anything for payment. Now some things are paid without a prescription, some things require a prescription from the doctor, and other things require a letter of medical necessity that show it's being used to treat a disorder or disease. A good list can be found on this website.
http://www.aetna.com/members/fsa/eligibleExpenses/overthe...
It is your money. You contributed it to the account. And, the FSA people don't want it back. You're good to keep it.
It is not fraud. Fraud would be keeping it without contacting the office. Fraud would be keeping money you didn't contribute if there were that sort of mistake.
What I suggest is that you contributed that money pretax. If you want to consider it, it may be that technically you should pay taxes on that money. But, unless there is a way to report that, I wouldn't worry about that either. I might ask a tax consultant or look this up on the IRS web site but probably I wouldn't be concerned enough to do that.
If FSA people aren't concerned, I wouldn't be either.
Sometimes it is more expensive for the FSA people to do the 'correct' thing and they are saying to keep it. I have been in business and allowed a customer the same type of credit (after getting it approved).
Here is another example, Victoria Secrets sent me 2 of the same exact shirts (I only ordered one). I called to send it back (i did not want to get charged for both). They told me to keep both because the process of returning would cost more for the company.
You might need to pay taxes on the extra money not used, but that is a different story. It is your money, you earned it. I have always hated the 'use or lose' rule of FSA, yet love getting the benefit of having my money tax free.
Once my FSA reimbursed me $500 for a dentist visit when they should have only reimbursed me the copayment. I think it's fine because that is technically YOUR money anyway. It's going to come out of your check. You just got it back all in one lump.
I agree. It is your money and they have a legitimate bill to support the reimbursement.
I just can't figure out how you would not have another $900 in doctor's visits, copayments, prescriptions, etc throughout the year... either you have damn good insurance that pays everything or I am doing something wrong...
A couple of points--FSA's will not normally reimburse until you submit an EOB (explanation of benefits) which would indicate what the insurance company would pay. Most doctors that are contracted with the insurance company agree to pay a specified amount (probably your $1100). If the FSA gets audited there might be a problem. What you may want to do to cover, is to keep all of your medical expenses this year in case you have to submit them. You can claim FSA expenses on anyone you claim on your tax return-they do not have to be on your health insurance. Legitimate expenses are optician visits, prescription eyeglasses, sunglasses, dentist visits. You can also take certain OTC meds if you have a prescription from your physician to submit with the expenditure. Pull up the whole list on the FSA website and look it over.
Well, I am pretty sure that most FSA's allow you to submit claims beyond the end of the year... usually the claim period runs from Jan 1, through the first three months of the NEXT year... so say Jan 1, 2013 all the way until March 31, 2014.
So you have longer to spend the money...
Does no one in your family take regular prescription medication? Or wear eye glasses or contact lenses? Surely you get your kids eye exams on some sort of regular schedule, right? And it is only May... a lot could happen between now and next spring. I mean.... you could break a tooth and need an implant. There's $3,000 right there. And you don't always know about these things in advance...
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ETA:
Oh.. and I am a stickler for documenting. Personally, if it were me, I would take it higher up the chain and get a supervisor to tell me they couldn't care less about the charge adjustment... and then I would insist they send that to me in writing. While waiting for that to arrive, I would write a letter detailing the conversation and documenting the adjustment to charges and send that to them as well, and keep a copy for my own records.
You're getting some poor advice in this thread. It doesn't matter what people want to do or think they should be able to do. What matters is procedure and law. The FSA rep you spoke to was wrong.
I had an FSA for years and I deal with taxes. I have also made a mistake submitting a bill before the insurance adjustment. Not as huge as yours, but you do legally have to return the over-payment to the FSA. Always submit the post-insurance receipt to avoid this issue..
Eventually, when the non-adjusted document you submitted is compared to the adjusted document, you'll get a letter or an email requesting you repay the FSA account. For now, keep the $900 in a safe place and don't spend it.
If you don't repay, you will owe normal taxes on the amount + a 20% penalty. It may also trigger an IRS audit.
I would keep trying to pursue it with the FSA people. In the meantime, put that $900 in a savings account and don't touch it. It will be there when they finally come to their senses, and you will earn a couple pennies (LOL) in interest.
As far as OTC drugs, you can get reimbursed for those, you just need to get a script from your doc. I do this all the time now. At my daughter's last physical, I had the doc write a script for ibuprofen, Tylenol, Benadryl, etc. I just turn in copies of the scripts with the receipts. I have had no problems getting reimbursed. Did you also know that you can get your mileage reimbursed for all of your doctor appts? I just did this too. If you have money leftover, work with your FSA admin person to figure out where you can spend the money. I have used FSA for over 20 years, and have never had to forfeit any of my money.
