Healthcare Reimbursement Account Sanity Check

angeltennis3

I should know the answer to this, but I want to make sure I am thinking about this correctly.

I have a Healthcare Reimbursement account. I have to determine how much I will contribute to that account in November for the following year. However, with a "life changing event", which birth qualifies for, I can add additional money to my HRA. I called and confirmed with my service provider that if after going through labor & delivery, I can then add money to my HRA and they will pay the claim as long as it has occurred this year (2014).

Fast forward...now I am trying to determine how much I should contribute. The way a HRA works is I contribute pre-tax dollars to my HRA directly from my paycheck. I pay my bills as I receive them, but then my insurance company forwards my hospital bills to my HRA provider. My HRA provider then cuts me a check and "reimburses" me for what I have paid using my pre-tax dollars.

So, come October, I will want to talk to my insurance company and get an estimate of my labor and delivery out of pocket costs, based on my insurance plan, and that is what I will want to put into my HRA, right?

I want to make sure I am thinking about this right because if I put too much into the HRA I lose it at the end of the year! Any insurance experts out there?

ss265

I'm confused. You are having a baby in 2014 right? Isn't the amount you are trying to determine what you should put into your account for 2015 medical expenses?

angeltennis3

Nope, I want to know how much I can contribute in 2014. Since having a baby is a life-changing event, I can't add any cash until she is born...I just want to make sure that adding 100% of my labor/delivery costs (that I would be responsible for paying) is the right answer, once I can add more in October. The exact $$$ amount I will discuss with my insurance company and hospital.

 

Right now I originally only put $100 in, not knowing if we would get pregnant in 2014, and that will run out by the time baby is here.

Justabean3

Whatever your out of pocket is, that is what you will meet plus deductible most likely. For example my deductible is 750 and my max out of pocket is 3000. I will meet every bit of that even at 20%. Also know that once baby is born they go toward family deductible and family out of pocket.

Justabean3

TicketTuesday said:

I'm assuming this is different than an HSA (health savings account)? It sounds the same by how you described it, except with our HSA we don't lose any unspent money at the end of the year. That would suck!

They call ours flex spending and it loses also if not used but you have until March to use it for the pervious year or April

angeltennis3

Thanks everyone! I just wanted a little validation I was thinking about it correctly. Thanks!

Jbunny100

You can probably contact your insurance company and ask them an estimate of out of pocket expenses for a vaginal deliver and C-section. They should be able to give you some idea. Also, if you are having a boy and plan on doing circumcision, you can add that cost in too.  The downside of increasing that amount in October, is that you have to have that chunk taken out of your paychecks for just 3 months (so increasing your HRA by $5K would be a lot taken from those paychecks).  Also, you might not get all of your hospital bills by March/April of 2015.  I'm not sure if the HRA takes the money based on the service date or the date of the bill.   You can probably ask your insurance company (or the HRA company) how that works.  I had DS in March and continued to receive bills until October. 

ss265

You have either 30 or 60 days to make the changes to your insurance based on a life change event. Usually it's 30 days but I think with the birth of a baby, they actually give you 60 days to make the change but check to make sure.

During that time period, you could receive most of your bills so you might not need to estimate anything and you could know exactly how much you have to pay out of pocket. When I had DS 2 years ago, this is what happened to me. But like a PP mentioned, you could receive bills for months. I would wait a little bit after the birth to see if you get bills and then decide how much to put into the account.

MrMrsandBaby

Insurance is fun isn't it!  There are HSA's, HRA's and FSA's.  Generally HRA's are employer funded so I'm wondering if you in in the minority that doesn't have an employer contribution?  I agree with PP, put in your deductible at a minimum and potentially up to your OOP, but if it is high you may not hit it.  Insurance should give you an estimate, you can actually get that anytime before delivery so if you want to plan you can do it now and it will help.

Good luck!

slsl509

Thanks for posting this. I didn't realize I could still allocate money mid-year for any reason. Turns out I have 45 days after the birth! I will just wait until I see the bills.