Michael, thanks for these comments. The team was just talking about how to record tax deductibility in a design session yesterday. I've forwarded your ideas to the designer just now.

I sure do appreciate everyone's ideas!

- Lisa

I know that the FSA area of QMEM did not get much attention in v2, but I am putting in another request for changes to how FSA is handled.

It would be great if there was an additional field to enter the amount that the FSA covers for each claim. The way it works now, the program assumes the FSA payment is whatever I paid on that claim. I've been trying with QMEM v2 to get my FSA totals right and my Tax Deductible report to be "right" and I'm not getting it!

I have 2 situations that I am trying to deal with...

Situation 1:

My FSA money ran out in the middle of a very large claim, so I would really like the amount that was not covered by FSA to appear in the tax report. But the claim is not on the tax report because it is "FSA reimbursed" (plus the FSA total is overstated).

The only thing that I can think of that may work is to split my claim (for a single service) into two claims to separate the FSA paid vs. unpaid (but then, I also have to split the insurance payment info, my payment info, etc.). I think this is a messy solution.

Situation 2:

I paid a claim, FSA reimbursed me (it's done automatically), then a secondary insurance reimbursed me. After I enter the secondary insurance, the amount paid on the claim is now ZERO. So, although this claim is included on the FSA report, the payment amount is zero, so my FSA total payment is understated. (In order to fix this one, I entered a "bogus" claim and left it uncatagorized. I entered the bill amount and payment amount as the amount FSA already reimbursed. What I don't like about this solution is that now it shows my responsibility and my payments overstated by this bogus claim amount.)

Does anyone have any other (and I hope better) suggestions? ?:|

Bonnie

Situation 2:

I paid a claim, FSA reimbursed me (it's done

automatically), then a secondary insurance reimbursed

me. After I enter the secondary insurance, the amount

paid on the claim is now ZERO. So, although this

claim is included on the FSA report, the payment

amount is zero, so my FSA total payment is

understated. (In order to fix this one, I entered a

"bogus" claim and left it uncatagorized. I entered

the bill amount and payment amount as the amount FSA

already reimbursed. What I don't like about this

solution is that now it shows my responsibility and

my payments overstated by this bogus claim amount.)

Bonnie

dumb question Bonnie (not being an accountant or tax attorney) -

Shouldn't the FSA be submitted after you received reimbursement from both your primary & secondary insurance companies? In other words -- only after the final insurance payments were made & claim the money you spent out of pocket and all reimbursements have been made.

Barrie

Not a dumb question at all. I was surprised when this happened too, but here's the situation...

My son was injured playing football (high school team). My primary insurer (Aetna HMO) asked about secondary insurance. The secondary insurance is the school's insurance. The reply was that they do not coordinate benefits with this other (or this type) of insurance. So, for our Aetna setup, whenever the provider submits the claim to Aetna (I don't see the paperwork), Aetna AUTOMATICALLY submits any remaining amounts (usually the copay amounts) for FSA processing. I get reimbursed from our FSA account automatically. This happens without any direct input from me!

For all of our normal claims, this is actually terrific, I only have to follow-up to make sure everything works as expected.

But now, I submit the football injury claim to the secondary insurance. They cover 100% of whatever the primary insurer didn't cover (which in our case was always the copay amount). So, now I have a claim (actually many claims) with a zero "My Responsibility" but FSA actually paid me money. QMEM doesn't know about this money because it assumes it is whatever "My Responsibility" is on the claim!

Now, if FSA had not covered these football injury claims, then the funds would have been used to cover other of my claims during the year (we did use up the total FSA funds), but these other claims are coded as "Tax Deductible" because there were no FSA payments against these claims.

So, the reporting on either FSA Expenses or Tax Deductions is incorrect. :-(

Any ideas?
Bonnie

Ok folks. I've figured out a workaround for Situation 1 "FSA Money runs out in the middle of a claim" (and it is a workaround, not a solution):

I have 2 situations that I am trying to deal with...

Situation 1:

My FSA money ran out in the middle of a very large

claim, so I would really like the amount that was not

covered by FSA to appear in the tax report. But the

claim is not on the tax report because it is "FSA

reimbursed" (plus the FSA total is overstated).

The only thing that I can think of that may work is

to split my claim (for a single service) into two

claims to separate the FSA paid vs. unpaid (but then,

I also have to split the insurance payment info, my

payment info, etc.). I think this is a messy

solution.

Here's the workaround:

Enter the claim in full, just as you should. Mark the claim as FSA Reimbursed (the total of My Payments on the FSA Expense report is now overstated).

Next, enter a claim for the same person, provider, service (use the expense log entry, not the details window entry: the negative doesn't work there) for the NEGATIVE amount of what FSA did not reimburse. For example, claim was for $100 but FSA only paid $54 because that's all you had left. So, in this step you enter the amount billed as $-46. It will show as (46.00), the parentheses noting the number as negative. My responsibility is -46. Then enter a payment as -46 (method "other") and reference "Fix FSA amounts". Also set the FSA status to FSA reimbursed. THE FSA EXPENSE REPORT IS NOW CORRECT, BUT TAX DEDUCTIONS REPORT IS NOT.

So, next step is to enter another claim for the exact opposite amount as the negative entry we just made. Same details. This example, $46 billed amount. My reponsibility is $46. Enter payment of $46 (method "other"). Set the FSA Status to "Tax Deductible".

NOW THE TAX DEDUCTIONS REPORT IS CORRECT. Note that the total billed amount, my responsibility and my payments amounts are also all correct (because the negative entry and postitive entry are exact opposites).

I believe this will solve this situation as a work around. Does anyone see any flaws in this logic?

(Hopefully, the details entry window will eventually also allow a negative entry in the billed amount so it works consistently with the log entry screen.)

Situation 2 (below) I still haven't figured out a better workaround.

Situation 2:

I paid a claim, FSA reimbursed me (it's done

automatically), then a secondary insurance reimbursed

me. After I enter the secondary insurance, the amount

paid on the claim is now ZERO. So, although this

claim is included on the FSA report, the payment

amount is zero, so my FSA total payment is

understated. (In order to fix this one, I entered a

"bogus" claim and left it uncatagorized. I entered

the bill amount and payment amount as the amount FSA

already reimbursed. What I don't like about this

solution is that now it shows my responsibility and

my payments overstated by this bogus claim amount.)

Does anyone have any other (and I hope better)

suggestions? ?:|

Bonnie

Here's the workaround:

Enter the claim in full, just as you should. Mark the

claim as FSA Reimbursed (the total of My Payments on

the FSA Expense report is now overstated).

Next, enter a claim for the same person, provider,

service (use the expense log entry, not the details

window entry: the negative doesn't work there) for

the NEGATIVE amount of what FSA did not reimburse.

For example, claim was for $100 but FSA only paid $54

because that's all you had left. So, in this step you

enter the amount billed as $-46. It will show as

(46.00), the parentheses noting the number as

negative. My responsibility is -46. Then enter a

payment as -46 (method "other") and reference "Fix

FSA amounts". Also set the FSA status to FSA

reimbursed. THE FSA EXPENSE REPORT IS NOW CORRECT,

BUT TAX DEDUCTIONS REPORT IS NOT.

So, next step is to enter another claim for the exact

opposite amount as the negative entry we just made.

Same details. This example, $46 billed amount. My

reponsibility is $46. Enter payment of $46 (method

"other"). Set the FSA Status to "Tax Deductible".

NOW THE TAX DEDUCTIONS REPORT IS CORRECT. Note that

the total billed amount, my responsibility and my

payments amounts are also all correct (because the

negative entry and postitive entry are exact

opposites).

I believe this will solve this situation as a work

around. Does anyone see any flaws in this logic?

I have not found any flaws yet, but I'd just like to point out for anyone for whom this isn't obvious that any associated mileage should be put on the "third" expense <the +$46 expense from your example>.

(Hopefully, the details entry window will eventually

also allow a negative entry in the billed amount so

it works consistently with the log entry screen.)

Indeed.

Situation 2 (below) I still haven't figured out a

better workaround.

>

> Situation 2:

> I paid a claim, FSA reimbursed me (it's done

> automatically), then a secondary insurance reimbursed

> me. After I enter the secondary insurance, the amount

> paid on the claim is now ZERO. So, although this

> claim is included on the FSA report, the payment

> amount is zero, so my FSA total payment is

> understated. (In order to fix this one, I entered a

> "bogus" claim and left it uncatagorized. I entered

> the bill amount and payment amount as the amount FSA

> already reimbursed. What I don't like about this

> solution is that now it shows my responsibility and

> my payments overstated by this bogus claim amount.)

>

> Does anyone have any other (and I hope better)

> suggestions? ?:|

Bonnie

I've been thinking about this one for a while, and I keep coming back to one question: What happens to the excess FSA reimbursement?

My understanding of what you are dealing with, is that because of an automated system between your primary insurer and your FSA custodian, you are getting paid money from your FSA for which <thanks to a secondary insurer> you don't have a valid medical expense. The IRS wouldn't be very happy to hear about that.

Based on the fact that your FSA money seems to run out, I would expect that ultimately that FSA "overpayment" gets used for other medical expenses that you have which, on the surface, appear to be paid from your pocket. If this is correct, than, for your own well-being and protection, I believe that you should keep very careful records of where the FSA overpayment is being used. Be able to prove that the medical expenses that you had in a given tax year equal or exceed your FSA withholding <and exceed the withholding amount by more than the amount that you used on line 1 of <url=http://www.irs.gov/pub/irs-pdf/f1040sab.pdf>Schedule A</url> in case you do that>. BTW, I'm not qualified to provide tax advice; please consult your tax advisor.

-Tony

Tony,

Thanks for your comments, especially about the mileage (since we found out that FSA reimbursed claims assume mileage was reimubursed also).

For situation 2...

I played with this one a lot today. And I believe using a workaround exactly opposite to what I described for siutation 1 will work...

So, post an additional "claim" using billed amount and payment amount, etc. Specify a POSITIVE amount first and mark it as FSA Reimbursed. Then create another claim in the NEGATIVE amount and specify it as Tax Deductible.

The totals for amount billed, payments, etc. will be correct because the two claims offset each other, but now one will increase the FSA expense report and the other will decrease the Tax Deductible report.

I have meticulously compared the reporting results using this method against my Quicken Financial data AND I can can get it to match!!! :^O

Tony, I really appriciate your comments and concerns about the IRS (believe me when this started happening at the beginning of last year, I was in a panic!) However, you are correct that I still "used up" my entire FSA amount on other claims. So I did not end up with any excess reimbursements.

My understanding of what you are dealing with, is

that because of an automated system between your

primary insurer and your FSA custodian, you are

getting paid money from your FSA for which <thanks to

a secondary insurer> you don't have a valid medical

expense. The IRS wouldn't be very happy to hear

about that.

Based on the fact that your FSA money seems to run

out, I would expect that ultimately that FSA

"overpayment" gets used for other medical expenses

that you have which, on the surface, appear to be

paid from your pocket.

Yes, this is correct.

for your own well-being and protection, I believe that

you should keep very careful records of where

the FSA overpayment is being used. Be able to prove

that the medical expenses that you had in a given tax

year equal or exceed your FSA withholding <and exceed

the withholding amount by more than the amount that

you used on line 1 of

<url=http://www.irs.gov/pub/irs-pdf/f1040sab.pdf>Schedule A</url> in case you do that>. BTW, I'm not

qualified to provide tax advice; please consult your

tax advisor.

-Tony

Bonnie