Monday, August 2, 2004

Plan your expenses now for the rest of the year

Start by evaluating what you've already spent

By Sandra Block
USA Today

If your spending plan operates on a calendar year, now is a good time to plan your expenses for the second half of 2004.

Start by reviewing how much you've spent this year. Most plans send participants periodic reports showing their balance, and many allow you to check your balance online, says Kevin Flahive, director for Wausau Benefits.

Once you've figured out how much you've got left, get to work. Some tips:

• Review your plan's summary description document, which should detail the expenses that are reimbursable under your plan.

The IRS sets guidelines for eligible flex account expenses. Your employer can't reimburse you for expenses that aren't permitted by the IRS. But plans are allowed to add their own restrictions, Patterson says.

For example, an individual plan may decide not to cover laser eye surgery, even though it's an eligible expense under IRS guidelines. That's important to know before you spend several thousand dollars on the procedure.

While employers aren't required to include all IRS-sanctioned expenses, they're supposed to tell you what expenses they will cover, Patterson says.

This information should be included in your summary plan description, and many plans also list eligible expenses on their Internet sites.

Your plan should also provide information on how to appeal if you believe the plan improperly denied a claim for reimbursement. If a claim is rejected, you have 180 days to appeal the denial, Patterson says.

• Provide plenty of documents to support your claims.

Inadequate documentation is the main reason most claims are rejected, Patterson says. Sending in a receipt showing how much you spent on a product or service may not be enough.

For example, suppose you send in a cash register receipt showing you spent $100 at your neighborhood drugstore. Unless your receipt is itemized, your plan administrator can't determine whether you used the money for IRS-approved expenses, such as non-prescription allergy drugs or a year's supply of shampoo.

• Make appointments now. Some health maintenance organizations schedule non-emergency procedures months in advance. If you wait until the end of the year, you may not be able to get an appointment until after Dec. 31.

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