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Medical Expense Reimbursement Plan Information - 2008
Usually, any item allowed as a medical deduction on your income tax return is eligible for
reimbursement from your Medical Expense Reimbursement (MER) Account.
Employees save money due to the tax-free status of their Cafeteria Plan contributions. Those
contributions are deducted from paychecks before taxes are charged. Employees eliminate their
obligation to pay federal, state, and Social Security taxes on their contribution amounts.
Use It or Lose It
The IRS rules state that you "use it or lose it" so any funds left in the account at year-end are lost.
On average, less than 2% of the account funds are typically lost. Employees often use their
account balances near year-end to pay for eyeglasses, eye exams, medical exams, or other
preventative medical expenses eligible under the plan.
Cafeteria Plan Enrollment
New employees may enroll within 30 days after their effective date of employment
Current employees can enroll during the College’s open enrollment period during the fall
semester (dates are announced by Human Resources) with an effective date of January 1 of
the following year
Employees may also enroll or change their plans at other times if a "qualified change in status"
occurs, such as marriage, birth, death, divorce, or adoption; a change in occupational status of
you or your spouse
Eligible Health Care Expenses
Eligible health care expenses that are defined by the Internal Revenue Code include expenses for
the diagnosis, cure, mitigation, treatment or prevention of sickness or injury.
Eligible expenses are defined in IRS Publication 502, "Medical and Dental Expenses." Copies are
available on the World Wide Web at http://www.irs.gov/pub/irs-pdf/p502.pdf.
The following expenses are eligible, at this time, for reimbursement through your Medical Expense
Reimbursement Account. To be eligible, the practitioner who provides these services must be
certified or licensed when required by the laws regulating his or her profession.
Acupuncture
Abdominal supports
Air conditioners *
Alcohol treatment
Artificial limbs/teeth
Automobile equipment to assist the physically disabled
Back supports
Bereavement and grief counseling
Birth control pills
Bone marrow transplants
Braille books and magazines
Car modification for use of a person with a disability
Certain special schooling for disabled persons
Childbirth preparation classes (Lamaze)
Chiropractic care
Contact lenses (including equipment and materials required for using contact lenses such
as saline solution and enzyme cleaners)
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Co-pays for prescription drugs, including birth control pills and insulin
Cosmetic surgery or procedure for a deformity from congenital abnormality, an accident or
trauma, or a disfiguring disease
Crutches
Deductibles (except for HDHP with HSA) and co-pays for health care and dental expenses
Dental care, including orthodontia and implant expenses (unless it is for cosmetic purposes)
Detoxification or drug abuse center care
Diagnostic tests
Diathermy
Doctor's fees
Doctor's office visits
Drug addiction treatment
Eyeglasses and fees for eye exams
Guide or guide dogs for visually or hearing impaired
Hearing aid exams, hearing aids, and supplies
Hospital services
Infertility treatment
Insulin, syringes, test strips and bits
In vitro fertilization
Lab fees
Lamaze classes
Learning disability tuition *
Massage therapy *
Medical alert bracelet
Medically necessary mattresses and boards *
Mental health or substance abuse expenses
Note-taker for hearing-impaired child in school
Nursing services
Optometrist fees
Organ donation expenses
Organ transplants
Orthodontia (see Dental Care, above)
Orthopedic shoes/inserts *
Over-the-counter (OTC) drugs such as antacids, allergy medicine and pain relievers
Physical therapy
Physician examination
Prescription drugs
Psychiatrist/psychologist fees
Psychoanalysis (unless required of students in psychoanalytic training institutions)
Periodontal fees
Radial Keratomy, RPK, or LASIK eye surgery
Radiation treatments
Remedial Reading *
Rental of medical equipment
Respirators
Routine physical exams
Sales tax and shipping and handling fees associated with an eligible expense
Smoking cessation programs and prescription drugs
Specialized equipment for disabled persons
Speech therapy
Sterilization surgery
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Support hose *
Surgery Therapy for mental/nervous disorders
Travel allowance/lodging for out-of-town medical care
Vaccinations
Weight loss programs or medications *
Well baby and well child care
Wheelchairs
Wigs for hair loss due to any disease *
X-rays
* Expenses must be accompanied by a physician's certification specifying the medical
disorder, the treatment needed, and how the treatment will alleviate the condition.
Expenses That Are Ineligible
The following expenses are not eligible under any circumstances
Deductibles that are covered by a High Deductible Health Plan with Health Savings Account
Expenses that have been paid out of an individual’s Health Savings Account
Cosmetic surgery or procedures
Diaper service
Ear piercing
Electrolysis
Expenses claimed on your income tax return
Expenses not eligible to be claimed as an income tax deduction
Expenses reimbursed by other services, such as insurance companies
Facelifts
Hair loss treatment, drugs or transplants
Health care expenses paid under any health plan
Household help, even if recommended by a physician
Insurance premiums
Illegal treatments, operations, or drugs
Late payment fees
Marriage counseling, unless performed for purpose of alleviating or preventing a physical
or mental defect or illness
Non-prescription supplements and herbal remedies
Social activities, such as dance classes, even if recommended by a physician
Teeth whitening
Vitamins/nutritional supplements
Weight reduction programs for general well being
Filing Claims for Reimbursement
Services must be provided during the claim year. You incur an expense on the date the service is
provided — not when you are billed or when you pay for it. You may file a claim for reimbursement
only after you or your dependent receives the eligible health care services, even if you paid in
advance. You may claim up to the full amount of your annual health care contribution at any time
during the year, even if you have not yet contributed that amount to your account.
Please submit a well-organized reimbursement claim to minimize the time spent auditing your
claim. If your claim requires a significant amount of auditing, it may be returned to you with
instructions to organize and resubmit for processing at a later date, and your reimbursement will be
delayed. Turnaround time in January and February is longer due to the high volume of claims.
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Filing a Claim
(Note for employees with a Health Savings Account/High Deductible Health Plan (HSA/HDHP) -
you will not be able to use your Medical Expense Reimbursement Account for your health plan
deductible or for any purchases made with your health savings account and will need to include
proof that you have already paid your deductible to be reimbursed for items such as prescription
co-pays)
Complete and sign a Medical Expense Reimbursement form (you can print this form by going to
www.kellogg.edu/hr/forms.html) and include with the form
for health and dental an itemized receipt from the service provider
must show provider/address, date of service, patient name and charge for the service
for health and dental an explanation of benefits (EOB) from your insurance company
must show date of service and amount paid by the insurance company
for prescription drugs receipts must show provider/address, date of service, patient name and
charge for the prescription
for vision services an itemized receipt from the service provider must show provider/address,
date of service, patient name, total charge for the service, patient’s charge for the
service and the insurance’s charge for the service (even if the insurance’s portion is $0)
for OTC drugs, you must provide a store register receipt that shows the date of
purchase, name of the product, purchase price as well as a note stating who purchased
the product, who the product was purchased for, and the reason for the purchase. The
IRS will not allow payment for OTC expenses without the appropriate back up.
please submit reimbursement requests in at least $50 amounts
please keep your original invoices/EOBs – send us copies
Documentation that does not contain all required information will be returned to you and may
delay your reimbursement. Canceled checks and cash register receipts (except for OTC drugs,
saline solution and enzyme cleaners), or statements showing only previous balances, or the
amounts paid or balances due, are not acceptable documentation.
You can submit claims for 2008 at any time during 2008 and until March 2, 2009.
Reimbursements will be paid no later than the end of the calendar month following the month in
which the Reimbursement Form is properly submitted to Human Resources. However, when
possible, Human Resources will try to process claims biweekly to ensure prompt reimbursement –
please be sure that expenses are eligible and all necessary documentation has been provided with
your claim form.
If you receive a refund from your provider or insurance company after you have received
reimbursement for an expense from your MER Plan, you must contact Human Resources to make
arrangements to return the refund amount to your account. IRS regulations do not permit
reimbursement for the same expense from two different sources.
Since payments for orthodontia services are frequently spread over several years, claims for
orthodontia expenses must be accompanied by documentation from your orthodontist stating what
portion of your 2008 charges are for 2008 services.
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