Handling Healthcare Reimbursements and a Flexible Spending Account - Live Like a Mensch
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Handling Healthcare Reimbursements and a Flexible Spending Account

"You guys can take care of the insurance paperwork, right?"


When J and I moved to Lafayette three years ago, it took us a little while to get used to the health insurance through his new employer. (And by "a little while" I mean that I think I finally got the hang of it sometime in the last month.)

Basically, our healthcare provider will often have us pay out-of-pocket for things that are covered, and they will then send us a reimbursement for whatever amount is covered.

There are two problems with this system:

1. The reimbursement arrives in paper check form, because apparently the health insurance industry is stuck in the 1950s when everyone wore fedoras and going to a physical bank on a regular basis was still a thing. (This is not to mention the fact that since the health insurance is in J's name, the paper checks are made out to him, which is only a minor pain in the tuchus for the person who actually puts on the required banking fedora and goes to do the paper-based banking--the person who, I might add, is not J.)

2. While each paper check comes with an attached "explanation of benefits," which theoretically should alert a sharp-eyed insurance beneficiary as to which particular recent out-of-pocket payment the check is reimbursing, these EOBs do not explain much. All it will tell us is who in our household received the service and the date on which the service was provided. With three individuals in our household, multiple doctors and dentists treating the three of us, and my policy of forgetting when appointments were once they have already passed, I cannot ever figure out what the money is actually paying for. This is not aided by the fact that we are usually NOT reimbursed for the full amount that we paid. Nor does our health insurer feel the need to let us know which doctor was seen.

I have often found myself depositing checks for random amounts with no way of knowing what we are actually being reimbursed for.

And of course, this is all made more complicated by the fact that we also have a Child and Dependent Care Flexible Spending Account, into which we put money for LO's Montessori schooling. Once a month, I send paperwork off to the proper authorities in order to receive a reimbursement check for LO's childcare. You would think that this type of check would at least be clear when it arrives, as I could recognize the amount being the same as what we pay for LO's childcare for a month. However, since we don't necessarily fully fund the FSA, we get random amounts of money from them at weird times depending upon how much is in the FSA at any given moment and how much the FSA still owes us for prior claims.

While these checks DO specifically state in the explanation of benefits that they are meant for LO's dependent care spending, they are otherwise identical to the checks we randomly receive from our insurer.

Fun, huh?

After three years, I think I have figured it all out.

J and I have a cash envelope for medical spending. We set aside a decent chunk of money each month to go into this envelope, and we use it to pay co-pays, medical bills, random demands for money in exchange for health care by roving bands of street doctors, etc. We trust the health care providers to deal with the paperwork with our insurer.

Since our cash envelope can more than cover our medical expenses, I don't bother to reimburse it with our reimbursement checks. I tried that for almost two years, and it drove me batty. We'd end up with a fatter envelope than we really needed, and I could never figure out exactly what I was reimbursing.

Instead, I put all of the reimbursement checks, along with the FSA checks, into the savings account I have set aside for LO's Montessori expenses. That way I know I'll never get a bill from Montessori without having the money set aside to pay it. Yes, I may be misappropriating funds, but it saves on the mental accounting, which is totally worth it.

And, since we don't necessarily fully fund the FSA for LO's care (since the costs can be variable depending on what's happening in a particular year), we would have to use some money from somewhere to make up the difference. Why not use these random checks?

I have wondered if someone who enjoys organizing money as much as I do can have this much trouble keeping track of reimbursements, then how on earth can the insurance company efficiently stay on top of it all? (I also wonder how many people miss out on their reimbursements because they don't have a fedora and never actually go to the bank. Seriously, is it that difficult to set up a direct deposit?)

How do you handle your healthcare reimbursements? Have you found a better system than the one I've cobbled together?



haverwench said:

Luckily for us, we have a PPO (preferred provider organization) plan, so for most of our appointments we just pay a copay up front, and the insurer takes care of the rest. We do pay up front for visits to a few providers (like our dentist), but since they're few and far between, we generally have no trouble telling which ones they are. However, I did once spend a significant amount of time on the phone with the dental insurer wrangling over the amount of our reimbursement (it turned out they'd changed their policy to include both "in-network" and "out-of-network" coverage without bothering to mention that fact in the plan handbook). And yes, they do still send paper checks, and they are made out to my husband and not to me. But that's not so bad; I just get him to endorse them before he leaves for work, and I put on my fedora and take them to the local bank branch while I'm out on my afternoon walk.

August 28, 2013 12:39 PM

Emily Guy Birken said:

@haverwench, I've recently discovered that you can deposit a check without the endorsement, as long as you are only depositing it in the account of the person named on the check, and you have the checking account information. It's made a huge difference in my errand-running.

August 29, 2013 9:50 AM

frugal_fun said:

We solve the problem by having high deductible insurance. We don't get reimbursed for anything. ;)

August 29, 2013 3:38 PM

Live Like a Mensch said:

Photo courtesy of Joyous! Recently, a friend told me that her husband's employer had switched health

September 19, 2013 10:28 AM

The Ministry of Silly Banking Rules - Live Like a Mensch said:

Pingback from  The Ministry of Silly Banking Rules - Live Like a Mensch

June 4, 2014 10:49 AM

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