I still have $300.00in my medical savings account…I have to submit my unpaid bills by Dec. 23, to be reimbursed…otherwise, the insurer keeps my money!
A few years ago, I was in a similar situation…I submitted a bill (for glasses) at the end of December, and the insurance company denied it!
What recourse do you have if your medical insurer keeps your savings?
Typically, none. This is typically how medical savings plans are designed - if you don’t incur expenses during the plan year and submit expenses by a certain date - you lose the money.
If it is some consolation, employers are often unhappy about another provision of these plans. If you enroll and agree to have, say, $100 taken out of each month’s check, but quit in February, you can still be reimbursed for $1200 in expenses if you had them before you quit. Even though you have only paid $100-200 into the plan at that point. And no, you wouldn’t have to keep paying the rest of the year.
But again, you probably have no recourse if you do not incur eligible expenses and submit claims during the defined time period. The best advice is to pay close attention to the restrictions.
There are some plans being bandied about to change some of the provisions for these plans, so monitor the terms & conditions of your plan carefully.
We are talking about a flexible spending account, right? If so, for one thing, the insurer doesn’t keep anything. Your employer is the entity keeping the money.
And how is it cheating? This is what you agreed to when you signed up for the FSA. They are abiding by the provisions of the plan. How are you getting cheated out of anything?
I think Ralph is talking about MSA’s - which are different from Flex Accounts. . .If that is the case, the savings are yours and always yours, whether or not the claim is “denied” or not. I’m confused as to why you would not have been reimbursed though. I think it is law what is considered a qualified medical expense (and I think eyeglasses are one of them). . .
I believe MSAs are only for self-employed people and yes, the rules are different, but then he wouldn’t be posting this question. There is a type of FSA, the Health Care Flexible Spending Account, which is what I think he’s talking about.
Why they wouldn’t reimburse for glasses, I don’t know, but if he is supposed to submit claims by 12/23 and he submitted for the glasses after that, then no reimbursement. There’s no “cheating” about it.
It sounds like the OP is talking about a Section 125 Cafeteria Plan.
Typically, any funds you leave in the account at the end of that calendar year are reabsorbed by the plan to cover plan expenses. The company that administers the plan is unable to earn an income off of the money that you pay into the plan; this includes earning interest.
The money that is absorbed by the plan goes to cover plan expenses, which usually means people who have been reimbursed for the total amount of money that they agreed to pay into they plan, then quit or were fired. Employers don’t go after those employees to recover those funds, the plan eats the cost. The money that is forfited at the end of the year offsets those costs.
Most employers will send out a statement in November stating the total amount of money that you must use before the end of that year. If you are in the habit of throwing away check stuffers or ignoring company memmos, then you probably missed that notice.
Also, and FYI: most plans allow you a 30-day grace period into the next calendar year; usually the end of Janurary, to submit any remaining receipts for reimbursement. However, the receipts must have a transaction date in that previous year. So, if you submitted a receipt for a service that was performed on Jan 5th of 2004, and you wanted to reimbursed for that with your remaining 2003 balance, the claim would be denied. The date of service must fall within the same year as the funds were withdrawn in, regardless of the date that you actually paid for the service.
I hope that answers your question. If you weren’t talking about a Section 125 plan, then I can’t really help you.
Be careful with your definitions. The employer will provide the plan but it may well be administered by a company that specializes in Section 125 plan administration. Any unused funds are kept by the employer, not the administering company (at least, that’s the way my company’s plan works).