Healthcare Reimbursement

Health reimbursement programs enable an individual to claim compensation against out-of-pocket medical expenses paid by them from their insurer. In case of employer-sponsored healthcare plans, the employer reimburses the expenses to the employee. The employer, in exchange, is entitled to several tax advantages, sanctioned by the Internal Revenue Service (IRS).[br]

Health reimbursement programs enable an individual to claim compensation against out-of-pocket medical expenses paid by them from their insurer. In case of employer-sponsored healthcare plans, the employer reimburses the expenses to the employee. The employer, in exchange, is entitled to several tax advantages, sanctioned by the Internal Revenue Service (IRS).[br]

Healthcare Reimbursement Methods

The fee-for-service healthcare reimbursement is the most common method of billing the insurers. Under this, the healthcare provider, such as a hospital, makes a reimbursement claim for their fee to the insurer on behalf of the individual. This method offers maximum flexibility and freedom to the individuals, enabling them to take full control of their health decisions. However, the flipside of this method of reimbursement from the insured’s point of view is that these require higher co-payments, or contribution from the insured.

 

Episode-of-care reimbursement is another common healthcare method, under which the providers, including hospitals and physician receive a lump-sum for all its services pertaining to a specific disease or condition. This eliminates the need to reimburse individual fees and charges; thereby controls the total healthcare costs in an economy.

 

From the insured’s viewpoint, however, this method is disadvantageous as it restricts the availability of healthcare. Moreover, the cost ascertained for treatment of a particular disease is based on averages, wherein if an individual’s treatment costs more than this, they have to pay the excess.

 

Expenses Eligible for Healthcare Reimbursement

An individual under a healthcare reimbursement program is entitled to claim compensation for not just standard hospital expenditure, but also the fees paid to medical professional, including dentist, physician, obstetrician, anesthesiologist, dermatologist and gynecologist. Other expenses eligible for healthcare reimbursement are:[br]

• Prescription or over-the-counter expenses on drugs for treating a medical condition

• Expense incurred on vision care, such as ophthalmologists fees and purchase of eyeglasses

• Cost of therapies for curing a medical condition, such as weight loss programs, infertility treatment and smoking/alcoholism cessation programs

• Expense incurred on medical equipment, including wheelchair, crutches and oxygen equipment

• Psychiatric care expenditure

• Expenses on assisting the disabled, including the cost of specially designed automobiles and Braille books

 

It must, however, be noted that expenses incurred on cosmetic surgery, without a valid medical reason, can not be claimed as healthcare reimbursement.