About The Health Care Reimbursement Account

You may use a Health Care Reimbursement Account to reimburse yourself for any health care expenses the IRS considers tax deductible. Eligible expenses include any...

  • Deductibles

  • Copayments and coinsurance amounts

  • Charges in excess of a health care plan's usual, customary and reasonable (UCR) benefit payment level (other terms, such as "reasonable" or "eligible" charges may also apply)

  • Charges that exceed plan limits or maximums

  • Charges for many common health care services or supplies that may not be covered or fully covered by your health plans.

These expenses may be incurred on behalf of yourself, or your eligible dependents, regardless of whether you or your dependents are enrolled in any of the FlexSolutions health care plans.

For more details on the types of expenses reimbursable through the Health Care Reimbursement Account, see Eligible and Ineligible Expenses.

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Who Is Eligible

You are eligible to participate in the HCRA if you are eligible to participate in FlexSolutions, the Company's flexible benefits program, as defined in Who Is Eligible. There are no additional eligibility requirements for the HCRA, though for your dependents' expenses to be eligible for reimbursement, the dependents' must meet the IRS requirements of an eligible dependent.

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Contribution Limits

You may contribute up to $5,000 each Plan Year to your HCRA. However, if you enroll, you must contribute at least $24 annually.

Because it is important to accurately estimate your eligible health care expenses, you may want to use the Expense Estimators A&B provides each Open Enrollment.

Changing Contribution Amounts

You may not change your HCRA contribution amount during the year as a result of a change in status.

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Eligible And Ineligible Expenses

The table below includes a partial listing of eligible and ineligible expenses. A more complete list of eligible expenses is included in IRS Publication 502, available from your local IRS office or on the IRS Website at http://www.irs.gov/formspubs .

Please be advised that the IRS can amend the list of eligible expenses at any time, with or without notice.

Eligible Health Care Expenses

Acupuncture

Laboratory fees

Alcoholism/ drug addiction treatment

Laetrile by prescription

Artificial limbs

Lasik surgery

Band Aids and First Aid Supplies

Lead-based paint removal from walls to prevent lead poisoning

Birth control pills/devices (if prescribed)

Orthodontia

Braces (e.g. orthotic devices)

Orthopedic shoes

Braille books and magazines

Physical examinations

Car controls for the handicapped

Physical therapy

Chiropractors' fees

Physician-directed smoking cessation program

Christian Science practitioners' fees

Prescribed drugs (including smoking-cessation medications)

Contact lenses, solutions and supplies

Prescription eyeglasses, including sunglasses

Guide dog for blind or deaf, including upkeep

Prosthetics

Hair transplants (if medically necessary)

Special communications equipment for the deaf

Hearing devices and batteries

Special education for the blind

Hospital bills

Speech therapy

Hypnosis for treatment of an illness

Tuition at special school for the disabled

Insulin and diabetes supplies

Wigs (if medically appropriate)
Ineligible Health Care Expenses

Cosmetic surgery, except when necessary to correct a congenital deformity or accidental injury

Nonprescription items used to maintain general health, such as dietary supplements and vitamins, toiletries (e.g., toothpaste and toothbrushes, mouthwash, dental floss, soaps, deodorant, non-medicated shampoo, etc.), cosmetics (e.g., wrinkle cream, moisturizers, make-up remover, etc.), and items used for cosmetic purposes (e.g., Propecia®, Rogaine®, teeth whiteners, etc.)

Expenses incurred for individuals who do not qualify for tax-free coverage under the Internal Revenue Code are not eligible.

Over-the-counter or non-prescription medications

Hair transplants or electrolysis (unless medically necessary)

Physician-recommended (or monitored) weight loss program (unless the program is for treatment of a specific disease).

Health club dues

Premiums or other charges for any type of health care policy or insurance (you do, however, pay for any contributions you make toward your/your dependents’ FlexSolutions health care coverage on a pre-tax basis)

Maternity clothes

Smoking-cessation medications sold without a prescription
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The Health Care Reimbursement Account Or Federal Tax Deduction?

Using the pre-tax HCRA is usually more advantageous than claiming health care expenses as income tax deductions. Here's why...

  • You may only deduct health care expenses from your federal income taxes if your expenses in a given year are greater than 7.5% of your adjusted gross income. For example: if you earn $60,000 annually, you could only claim a deduction for the amount of expenses you incurred in excess of $4,500.

  • In contrast, with the HCRA, you reap tax advantages with the first dollar you spend on health care expenses.

Keep in mind, however, that you may not receive reimbursement from your HCRA and claim a tax deduction for the same expenses. For more information, contact your tax advisor or the IRS. You should also know that because the amount you contribute to your HCRA will reduce the amount of Social Security taxes you pay, your contributions may slightly affect your Social Security benefits.

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