One of the best ways you can manage your health care budget is to take advantage of a Health Care Reimbursement Account (HCRA).
A Health Care Reimbursement Account (HCRA) allows you to pay for qualified health care expenses with pre-tax dollars. Contributions to your HCRA are made from your pay before taxes are withheld. This decreases your taxable income, which reduces your Federal income and payroll taxes.
How it Works
The ASEA Health Trust’s HCRA works like a personal checking account.
- First, decide on the total amount you want to set aside in your account, up to the IRS-determined limit. The minimum is $20 per month and the maximum $2,650 per year (effective 7/1/2018). Use this worksheet to help determine your election amount. You may want to review receipts from last year for your out-of-pocket health care expenses. To see your health care spending history, click on Your Account. Then select Your Claims and then HCRA History. Using this information, your receipts and this worksheet, you can estimate the amount you want to elect for your HCRA. Only budget for those expenses eligible for reimbursement through the HCRA. Remember, eligible expenses include those for you, your spouse and your dependents.
- Be careful! These accounts work on a ‘use it or lose it’ basis. You will lose any unclaimed money left in the account at the end of the HCRA Plan Year (the 14 ½-month period running from July to September 15 of the following year). Your account balance does not carry over into the next year.
- Your pre-tax ‘deposits’ will automatically be deducted from each paycheck and placed into your HCRA account.
- You pay for eligible health care services as they are incurred.
- Then submit a HCRA Reimbursement form to the ASEA Health Trust Administrator, along with a copy of your receipt. If you checked the Coordination of Medical Claims box on your enrollment form, the medical claims will automatically be coordinated, but you will still need to submit prescription drug and other claims. Claims must be received or postmarked by November 15 each year.
- You will be reimbursed directly from your account using the tax-free money that you deposited.
You may request reimbursement for expenses incurred from July 1 through September 15 of the following year, giving you 14 ½ months to incur expenses and request reimbursement from your account. Keep in mind that you only put money into your HCRA for 12 months, from July through June of each year.
- You must re-enroll every year.
- To automatically coordinate with the medical plan, make sure you select the Coordination of Medical Claims box on the HCRA enrollment form.
- The full amount of your annual HCRA contribution is available on the first day of the Plan Year.
- The amount available for reimbursement is based on your annual contribution amount (minus any previous reimbursements) – not on your contributions to date.
For questions about HCRA reimbursement, contact the ASEA Health Trust Administrator.
You can use your HCRA for most medically-necessary expenses that are not covered by any health plan. Examples include:
- Annual deductibles
- Non-PPO penalties
- Over-the-counter drugs or medications WITH a doctor’s prescription
- Over-the-counter items in these eligible categories: bandages and wraps, birth control, braces and supports, catheters, contact lens supplies, denture adhesive, diagnostic tests and monitors, first-aid supplies, insulin and diabetes supplies, ostomy products, reading glasses, wheelchairs, walkers and canes
- Transportation expenses to and from your health care provider
- Chiropractic, acupuncture and alternative health care
- Prescription copays and coinsurance
- Vision exams, eyeglasses and contacts
- And many others
For a complete list of eligible and ineligible expenses, see Internal Revenue Service (IRS) Publication 502, Medical and Dental Expenses.
- HCRA Plan Document
- Health Care Reimbursement Account form
- Internal Revenue Service (IRS) Publication 502, Medical and Dental Expenses
- ASEA Health Trust Administrator
Mail: ASEA Health Trust, PO Box 5434, Spokane WA 99205-0434