ShopFlex-Ed: Is concierge medicine FSA-eligible?
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.
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Am I allowed to make FSA changes at mid year?
Life is full of surprises. When it comes to life events, there are those that happen unexpectedly and those that you plan for. When you sign up for a Flexible Spending Account (FSA), you must stick to a specific budget, or contribution per year. It's important that you think carefully about that contribution amount by taking into account expenses for medical visits, routine dental and eye care, and over-the-counter products you need.
But, what you elect to contribute to an FSA during your company's yearly open enrollment isn't necessarily set in stone. As mentioned earlier, qualifying life events can occur that alter your necessary coverage. The birth of a child, marriage, or a change in employment, will all affect coverage for your FSA plan. So if you envision that FSA changes may be on the horizon, developing a plan of action and working with your employer to get everything updated is essential.
When such an FSA qualifying event occurs, many (but not all) employers allow you to make a mid-year election change to your FSA. Let's dive in and explore how you can best navigate FSA qualifying events.
Defining Qualifying Events
A qualifying event affects your eligibility for FSA coverage, and you can only make changes to your FSA that are "consistent" with that event. Always contact your third party administrator (who handles your FSA account) about qualifying events, or check your Summary Plan Description for guidelines on which changes you are allowed to make under your plan. As mentioned before, not all employers or FSA plans allow employees to make mid-year changes.
Examples of Qualifying Events
- Changes in marital status such as a marriage, divorce, annulment, death of a spouse or a legal separation are all qualifying events.
- Changes in the number of (tax) dependents such as through birth, death or adoption would affect FSA coverage.
- Employment changes certainly would affect plan coverage. Maybe you just started a new job or changed from a full-time or part-time position. Unlike a Health Savings Account, your FSA does not transfer with you as you leave your job – so be sure to use remaining funds, if you know you're leaving. Employment changes not only impact you, but your dependents' coverage, as well.
- Eligibility requirements for children. It's also important to keep in mind coverage eligibility requirements for your children. Under the Affordable Care Act, non-dependent children under the age of 27 years old are eligible for FSA coverage.
- A change in residence might also be an allowed change, but only if the move directly affects your coverage.
- Sometimes a Health FSA plan may allow for a change (for the employee, spouse or dependent) due to a COBRA qualifying event. This is at the discretion of the employer. For example, let's say that Anne goes from a full-time job to a part-time job, loses her health coverage, and opts into COBRA. She could increase her tax-free contributions under her current employer's plan because she lost eligibility of normal coverage as she lost work hours.
- A Health FSA plan might allow for a mid-year change due to judgments, decrees, or orders resulting from a divorce, annulment, legal separation or a change in legal custody. It would have to affect health or accident insurance coverage for a (foster) child who is a dependent. You would be able to add or cancel coverage for a child.
- A change in election is also possible (if allowed by the company and FSA plan) if an employee is entitled to Medicare or Medicaid. Employees can adjust the election to cancel, increase or reduce health coverage.
- Leaving under the Family and Medical Leave Act (FMLA) would let employees revoke elections of group coverage or continue group health coverage. This depends on what the FSA plan allows. Employees have a few options when it comes to FMLA and continued coverage during unpaid leave. They can prepay contributions (pre-tax), they can make payments along the way, or they can pay after returning from the leave.
Contacting Your Third-Party Administrator
You should always check in with your TPA within 30 days of the qualifying events. Your Summary Plan Description defines which (if any) qualifying events allow you to make changes under your plan.
Can I submit a claim to my dependent care FSA for children’s classes at Parks and Rec? i.e. tumbling/gymnastics, etc.?
By its design, a dependent care flexible spending account (DCFSA) is designed to allow workers to set aside pre-tax dollars to pay for eligible care expenses for a child, disabled spouse, elderly parent or other individual listed as a dependent who is physically or mentally incapable of self-care. Day camps, such as soccer, football, ballet, etc. are eligible with a DCFSA, provided that they enable the account holder to be gainfully employed, seek gainful employment or go to school full-time. Classes have the potential to be eligible, but on a case-by-case basis. If you can prove that these Parks & Rec classes allow you to work, seek work or pursue an education, they will most likely be covered by your benefit.
How can I contact my third party administrator?
Each year during open enrollment you sign up for health benefits. A Flexible Spending Account (FSA) could be included in the employee benefit package if your company offers the plan.
Sometimes your employer handles the administration of FSA benefits, but often a Third Party Administrator is asked to step in. A Third Party Administrator (TPA) is an independent organization that handles employee benefits administration. Third party administrators are typically hired to handle benefit processing as this can be complex and time consuming for employers. They're essentially outsourced mediators (between employees and employer) in charge of claims processing, benefit enrollment, and benefit management on behalf of your employer.
FSA administration deals with protected health information, which is safeguarded in compliance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA). TPAs must comply with these HIPAA safeguards and stay updated on important health regulations that could affect these benefit plans.
Who is my TPA?
A Third Party Administrator (TPA) is the "go-to source" for everything related to your Flexible Spending Account. TPAs can also be referred to as FSA administrators, benefits administrators, or FSA providers.
Your TPA has access to your FSA account including your FSA balance, plan information and guidelines, and plan deadlines. Your TPA can also answer questions about FSA eligible products or FSA eligible services which qualify for your individual plan. Your TPA is also responsible for claims reimbursement.
How do I contact my TPA?
You should reach out to your Human Resources department if you're unsure who your TPA is. If you have an FSA debit card, you can contact your TPA by checking if there is a toll-free number listed on the back of the card.
