By Janet Palcko
Nov 25, 2014 – As “concierge medicine” gains popularity, we are getting a lot of inquiries as to whether such fees can be reimbursed from a Health FSA or HSA. The answer is not always clear.
What is Concierge Medicine?
Concierge medical practices provide a personalized focus to healthcare. Patients may experience longer visits, an emphasis on preventive care, greater access to their physician, more patient education, and insurance management services. Patient loads are less than in traditional medical practices. The patient pays an additional fee for these “concierge services”; fees vary widely, but average $1,000-1,800 annually for a Family.
Why Doing an FSA Makes More Sense Than Ever
Can Concierge Fees be reimbursed from a Health FSA or HSA?
A quick rule of thumb is if the expense is directly related to a qualified medical service that has been provided, it is reimbursable. If it is only for access to services, or the right to “get in the door,” then it is not a qualified medical expense for HSA/FSA reimbursement purposes.
Who decides whether an expense is reimbursable under a health FSA or an HSA?
Not the claims administrator and certainly not the doctor. It depends on whether it meets the IRS definition of a qualified medical expense and whether it is a permitted expense under the employer’s plan.
HSAs, the Affordable Care Act and Concierge Medicine
In practical terms, to determine whether an expense is for medical care, an administrator (NEO) must ask: what, who, when, and why?
- What is the expense for? The expense must fall within the legal definition of medical care as defined in Code §213(d) and be permitted under the employer’s plan. The expense must be for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body. It must primarily be to alleviate or prevent a physical or mental defect or illness. This is the basis for all eligible medical expenses.
- Who is the expense for? The expense must be for the participant, his or her spouse, a tax dependent, or a child who has not attained age 27 as of the end of the taxable year.
- When was the expense incurred? It must be within the Plan Year (for a health FSA) or after the account was established (for an HSA).
- Why was the expense incurred? It must be primarily for a medical purpose (e.g., generally not for cosmetic purposes).
|Access Fees. Participant subscribes to a medical concierge to have access to care. At the time services are rendered, additional fees directly related to the medical care given are charged and billed to insurance.||No – the subscription portion of the fee is not eligible. But generally the amount related to actual care provided would be considered as an eligible medical expense|
|Annual Physical. A fee is charged for an annual physical, and includes no additional non-medical services or “amenities.”||Yes – but if the fee was paid up front, it is only reimbursable once the physical has actually been performed. Keep in mind that annual physicals are often reimbursed at 100% by insurance; if the employee doesn’t have any out-of-pocket expense for the physical, nothing is reimbursable by the FSA or HSA.|
|Concierge Fees. Fees are exclusively for special treatment or extras like expedited or longer appointments, special waiting rooms, newsletters, etc. and are charged whether medical services are actually provided or not.||No – These are not qualified medical expenses and, therefore, are generally not eligible for reimbursement through the participant’s HSA or FSA.|
|Monthly Retainer Fees. Similar to concierge fees above, but the fee offsets part or all of the cost of future services. The same is true of a monthly fee that a patient must pay in addition to any co-pays, deductibles, or other charges for office visits.||No – Think of it as being similar to an insurance plan that will cover potential future expenses. They are like insurance because they are payable whether or not medical care is provided. Thus, they fall under the “no reimbursement of insurance premiums” rule that applies to health FSAs.|
Bottom line: Most of these arrangements do not meet the criteria to be considered qualified health care expenses under the Code. If you want to submit such expenses under your employer’s FSA plan, expect to be asked to back up the reimbursement claims with documentation that medical services were rendered.