"Ow, that's gotta hurt." These are words we expect to hear after leaving a doctor for a sports injury. But it's not what we expect to hear when getting the bill for that treatment. Obviously, medical treatment is expensive -- that's why we pay those hefty premiums, after all.
But when the treatment and products we receive are more expensive through insurance than they are out-of-pocket? Well, let's just say it's eye opening. And this week's article might just be the most extreme example we've heard in a while.
Price Of A Brace Brings Soccer Player To His Knees - Paula Andalo, Kaiser Health News
Esteban Serrano didn't go play soccer expecting it to make a major dent in his finances. But that's exactly what happened when he injured his knee during a friendly match in his neighborhood. And even though he attempted the tried-and-true "walk it off" method, the pain was too severe to ignore, so he headed to an orthopedist for a closer look.
Sure enough, Serrano didn't just "tweak" his knee -- it was a pretty bad strain of his medial collateral ligament (MCL). But thankfully, there was no tearing, so his recovery would consist of basic OTC pain meds and a standard knee brace for support.
Thinking that was the end of his struggle and that his insurance provider would handle the rest of the details, Serrano quickly put the incident aside and went about his life. Then the bill arrived, with some alarming numbers at the bottom.
His total bill for the office visit and x-ray, was pretty standard stuff -- a relatively conservative $315. But the sticker shock came from the $829.41 charge for a basic knee brace. Serrano's insurance provider only managed to cover $52 off the list price of $882 … again, for a knee brace.
And Serrano was being billed for the difference. Even though the brace (an item that's also FSA-eligible, we might add) is available for less than $250 from most retailers, Serrano was forced to pay this exorbitant price because his doctor provided it during the visit. We understand retail markup. We understand fees and costs. We don't understand how there could be a 300% markup on a basic neoprene and metal support brace.
We also don't understand how it wasn't clearly communicated during the visit that Serrano would be responsible for the majority of the cost. Sure, prices vary (and so do doctors, for that matter) but to casually leave that out of a 1:1 discussion? It's an oversight that we'll never understand, much less condone.
The article goes into more detail about the case, including what Serrano could have done during the visit to get ahead of these charges before they went through his insurance provider. For that reason alone, it's worth a few minutes to give it a read.
Fridays (with Benefits) is a weekly roundup of the latest headlines about employee benefits -- from FSAs to fitness programs and everything workplace wellness. It appears every Friday, exclusively on the FSAstore.com Learning Center. And for the latest info about your health and financial wellness, be sure to follow us on Facebook, Instagram and Twitter.
Concierge medicine (also known as boutique practice) is becoming increasingly more popular. Basically, concierge medicine is a "highly attentive" way to get healthcare, in which patients pay extra fees in exchange for more personalized care and better access to their doctors. Doctors carry fewer patients, and are usually more available to speak with them. Not a bad setup if you're tired of quick appointments that only leave you with more questions.
Concierge physicians or boutique practices charge a fee for this additional level of service and accessibility. This fee ranges from a small monthly fee to annual fees in the thousands and is usually accompanied by regular fees for services received. In exchange for the annual fee, a concierge doctor is typically available 24-hours a day and office visits are often longer and more thorough.
So, if you're interested in concierge medicine (or at least learning more about it) you're probably wondering, "Can I use my FSA to pay for concierge medicine fees?" As you'll see below, it's not a "yes" or "no" answer.
Well...are concierge medicine services and fees FSA-eligible?
Short answer? Not usually and probably.
As the IRS indicates that only fees for medical services actually performed or received can be reimbursed, the fees paid to retain a concierge doctor where no services are actually received are not eligible. However, if the patient receives an actual service from the doctor, such as a medical visit, the fee for that service is reimbursable provided that the patient has sufficient documentation.
To further clarify the issue, here are a few examples that illustrate what we're saying:
Example 1: Anne pays concierge Dr. Smith $2,500 annually as a retainer for his promised care as needed. Anne has a fairly healthy year, does not visit Dr. Smith, and submits the $2,500 fee to be reimbursed from her FSA. The $2,500 is not eligible, as Anne did not receive any medical services throughout the year.
Example 2: The following year, Anne pays Dr. Smith $2,500 as a retainer for his promised care as needed, but this year, Anne visits Dr. Smith 10 times to receive medical care. Each visit is attributed to the $2,500 retainer fee, in the amount of $250 per medical visit. Provided that Anne has sufficient documentation to show that $2,500 worth of medical services was actually received, her FSA may be used to reimburse these expenses.
Example 3: Anne changes doctors and starts using concierge Dr. Nathan, who charges $1,000 per year plus an additional fee of $100 per office visit. Anne visits Dr. Nathan three times throughout the year for medical care. Anne may be reimbursed with sufficient documentation for the 3 medical visits, or $300. The $1,000 annual fee isn't eligible.
So, no, paying a concierge doctor a retaining fee doesn't offer much in the way of FSA eligibility, but if you need the doctor for medical services throughout the year, it certainly can. And in a world where doctors are increasingly busy, more time with a dedicated physician is still a really attractive option for those willing and able to spend for it.
New to FSAs? Need a refresher course in all things flex spending? Our weekly Flex-Ed column gives you a weekly dose of FSA Living 101, offering tips for making the most of your tax-free funds. Look for it every Thursday, exclusively on the FSAstore.com Learning Center.
As the time of year when you can elect benefits, make changes to existing plans and take advantage of new offerings, Open Enrollment is a crucial task for any employee. Depending on your plan year structure, your Open Enrollment period may be weeks or months away, but it's never too early to start thinking about your health coverage for the coming year.
When your Open Enrollment period approaches, these 5 tips can help you get a head start on your benefits election!
- Calculate Your Yearly Medical Expenses
While medical expenses can be unpredictable, in many cases you may already know how much you and your family members are going to spend over the course of a year. As you calculate your expenses, think about:
- How often you visit doctors/specialists (and your dependents as well)
- How much you pay yearly for prescription drugs
- Will you be taking on any new dependents in the coming year? (birth of a child, caretaking adult dependent)
- How much a health plan will cost over a year
- Evaluate Your Plan Provider Network
Even over the course of a year, your company's provider network could have changed drastically. Doctors groups could join together and hospitals and health systems could re-contract with insurers which could change your benefit options. Your employer and health administrator have a number of tools and resource that can help you assess the cost impact of your health plan choices and the overall quality of these plans when making your health plan choices.
- Vision/Dental Insurance
In addition to health coverage, vision and dental plans are an important facet of the open enrollment process. Some health plans may already include this, others may act as standalone benefits. Most companies will offer vision benefits plans or vision discount plans. A vision benefits plan operates like traditional insurance where a premium is paid in exchange for eye care coverage and some coverage for qualifying vision correction aids like frames and lenses. Additionally, a vision discount plan, typically offers lower premiums, but will only provide a percentage off qualifying vision expenses and products.
In regards to dental coverage, this is usually much simpler and should be based on your overall health needs. If you only anticipate regular cleanings and checkups, a low-priced dental plan would be best. However, if you anticipate major dental expenses such as root canals, oral surgery or orthodontic expenses in the coming year, a more comprehensive dental plan could be better for your bottom line.
- Is a CDHP right for you?
Consumer-directed healthcare plans like flexible spending accounts (FSAs), health savings accounts (HSAs) and more are funded through the employee's own pre-tax funds and can be used on qualifying health expenses. This offers the benefit of paying less in taxes each year through monthly payroll deductions, and they can even be funded by employers as well. Individuals or families can open these accounts, and they can provide a major boost for those who maximize their benefits. Learn more in our outline of the most common CDHPs. (will hyperlink)
- Take Advantage of Health & Wellness Programs
Health and wellness programs have become increasingly popular amongst employers who encourage their employees to get and stay healthy - which can save both the company and the employee plenty in the long run! Some common programs include health assessments, weight loss programs and health coaching, which could help you better understand your health status and make more informed health plan choices in the future. Some companies also provide financial incentives to those who participate in programs and meet specific goals, so this is a benefit that you definitely don't want to miss out on!
Still have Open Enrollment Questions?
A Flexible Spending Account (FSA) gives you the opportunity to pay for a variety of out-of-pocket medical expenses on a pre-tax basis. Dental care can certainly be a part of those expenses, but teeth whitening is not considered to be an FSA eligible expense.
Because it's considered cosmetic in nature, teeth whitening will not be reimbursed with your FSA. The IRS determines and qualifies something as “FSA eligible," including for medical services. If a service is deemed “medically necessary," you would be able to apply your FSA toward payment. In terms of dental care, a cleaning, root canal or a filling would be covered since these are seen as “medically necessary" procedures.
Other dental care that you can use your FSA for:
- Extractions and implants
- Caps and crowns
- Fluoride treatment
*Your FSAs will list specific guidelines about coverage for orthodontia. Check with your FSA administrator to discover what's covered.
Search our extensive FSAstore.com Eligibility List to learn about additional FSA eligible expenses. If you're ever unsure about eligibility, contact your FSA administrator (or your HR department) to find out what's covered under your FSA.
Workplace benefits like Flexible Spending Accounts (FSAs) are well-known for their ability to cover a wide variety of medical services and products, but they can also provide a major boost for employees through year long tax savings. With April 15 (Tax Day) on the horizon, now is a great time of year to discuss the many tax benefits that come with FSAs and how they can put more money back into your pocket and alleviate your concerns when medical expenses pop up. Learn more about FSA eligible expenses via FSAstore.com.
How do FSAs affect my tax earnings?
According to Bank Rate, the vast majority of companies will offer one of two FSAs – a Dependent Care FSA that covers costs like day care and other child-related expenses while parents can work, look for work, or attend school full-time, and a medical FSA that covers routine medical expenses. In both cases, money is taken out of your salary with payroll reductions each month on a pre-tax basis. Simply put, these funds are placed into an FSA on a pre-tax basis, reducing taxable income and providing more savings in the long run.
Do I need to do anything extra around tax time?
While there is a lot of jargon and conflicting information out there, filing taxes with an FSA is extremely easy. It's important to remember, while you can use your FSA for countless medical products and services, the account is not really yours, but the employer's. While you don't need to add anything specific to your tax return, you should be mindful of how much money is available in your FSA, as well as what you'd like to spend/carry over to the next year.
Currently, employees can allocate up to $2,500 per year in their FSAs. If the FSA runs on a calendar year basis, FSA holders typically have a deadline to use their funds by December 31, or if an employer utilizes the IRS's grace period, this is extended to March 15. It's important to note that these grace periods are not required by the IRS, so it's vital to check with an employer to see if this policy is in place. Last but not least, thanks to a new U.S. Treasury Department ruling, employees may be permitted to roll over up to $500 of their FSA funds to the next year, which can allow them to better plan their spending each year.
Can I itemize my FSA expenses?
According to Tax Brain, employees who have an FSA can itemize their deductions come tax season, but they will not be able to apply their FSA expenses when itemizing. Remember, this money has been placed in the account on pre-tax basis, so this would be considered double-dipping. Another key point to remember is that medical expenses must be at least 10 percent of your adjusted gross income (AGI), to qualify as deductions.
Ultimately, by staying on top of your FSA funds, being aware of employer policies and spending wisely, FSAs can be extremely beneficial for your long-term budget. An FSA will change little when it comes time to file a tax return, but utilizing the benefit throughout the year and being mindful of allocations can help you realize major tax savings each year.