Difficulties with medical reimbursements
I have a PPO so I am often paying for medical visits (sometimes co-insurance, sometime for full-price). I then submit to my insurance and wait weeks for a paper check to arrive. Usually, the check covers 70-80% of the visit, so I submit the receipt to my HSA to cover the remainder of the medical bill. For example, I pay $95 a visit for my chiropractor-- my PPO pays me back $70, and I submit receipt to HSA to get the balance, which is $25.
I have not created an account for the HSA in YNAB. When I get checks from the insurance co, I categorize the inflows as medical (category) and when I am reimbursed by the HSA I categorize the inflows as medical (category).
Lately, I have had quite a few medical visits and checks + reimbursements, and I am struggling with expenses in one month and reimbursements in the next (or even the next).
Should I be categorizing each reimbursement as To Be Budgeted and then adding funds to the medical budget category?
Hi, Daniel Kiely
Reimbursements can be challenging. I generally use a pre-funded category to pay for my expenses and a tracking account to manage costs eligible to be claimed from insurance. I created a really detailed procedural on the method (with screen shots) in this thread linked here for another YNABer facing an uphill battle with medical expenses. And there are links to YNAB help docs on reimbursements as well. You may find it helpful.
Question for you. Your post linked and the documents make sense when you are talking about Credit Cards. I pay all of my medical bills from Checking.
My current process has medical bills and medical bill inflows (reimbursements) going to the same category. What I end up doing is budgeting the average each month. The problem I have is that there are some months where the reimbursements lag and I don't have enough money set aside in the category.
1. Is there a better way to handle for medical bills/reimbursements for a checking account? Should I follow your recommended process (which based on the document is really for Credit Cards)?
2. I have a sizable check I just deposited for reimbursements. How should I categorize that? It is for for bills from 2019.
I pay all of my medical bills from Checking.
The offset or pre-funded category (one of the standard approaches) is most appropriate when you are paying with cash. The drawback is you need to devote $X toward that category. The money's gotta come from somewhere, right?
However, the Temporary Debt approach can be used if you convert the cash overspending to debt by reallocating from the CC Payment category. This requires that you have used the CC for some other budgeted purchase and therefore have funds available to reallocate.
After that, the Temporary Debt approach applies:
- Categorize outflows and inflows to Medical
- If Medical ever turns green, move those funds to the CC Payment category
(A search for the Medical category in All Accounts will give you the pending reimbursement. The category activity is just the net in the current month, which often isn't what you want.)
Edit: I wouldn't make an account for the HSA. Look at your monthly statement if you need to know the balance.