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?

Thanks,

Dan

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  • 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.

    Like 1
  • HappyDance

    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. 

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      • HappyDance
      • YNABing consistently since 2014
      • HappyDance
      • 8 mths ago
      • Reported - view

      jestarr 

      If my reimbursable spending is made from a cash-based account (chequing), I use a pre-funded category. I have some of my e-fund permanently assigned to that task. If the expense exceeds the current category balance, I move more in from my e-fund.  I want my budget category balances to be entirely reliable at all times, and until I receive the reimbursement or insurance claim payment, those funds are not available to spend on anything else.

      Edited to add:  I also pre-fund the category if I'm spending on a credit card. I can't stand seeing overspending in my budget.

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      • HappyDance
      • YNABing consistently since 2014
      • HappyDance
      • 8 mths ago
      • Reported - view

      jestarr 

      How you categorize the reimbursement cheque is up to you.  I prefer to record insurance claim reimbursements as income and office expense reimbursements as direct to category.

      In the first case, I would incur the medical cost whether I had the insurance coverage or not, and I want to be able to see how much I'm spending on health services and products for future planning.  In the second case, office expenses are really a pass-through; I wouldn't be buying the items if I didn't work here and if they weren't going to reimburse me 100%, so I don't need to track the details and only need to track how much is owed to me.

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      • jestarr
      • jestarr
      • 8 mths ago
      • Reported - view

      HappyDance I take it e-fund means emergency fund?  So is the better approach for me to simply fund the average medical bill expense, and categorize medical bill reimbursements separately?  Then I'm guessing I would use the move money tool to move reimbursements into the medical bills, or anywhere else in the budget that is a priority? 

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      • HappyDance
      • YNABing consistently since 2014
      • HappyDance
      • 8 mths ago
      • Reported - view

      jestarr 

      Yes. By e-fund I meant emergency fund.

      I can't really say what is the better approach for you.  I'm an experiential learner.  My process is one that has grown out of using YNAB in conjunction with the rhythm of my expenditures for five years and the predictable cash flow/reimbursements in my life.  I don't know if this will help you, but I'll elaborate a bit on how I do my own medical stuff.

      My preference for all things medical, dental, optical, etc. is to spend out of a medical/dental category. I keep this category under a Life Happens category group (emergency funds broken into sub groups: car repair, medical, etc). I will  inflow reimbursements as Income, and allocate the returning/reimbursement funds back to the medical/dental category to top it back up again. That way I can see the totals spent and total received as reimbursement from insurance as separate lines in the income/expense report.

      In illustration:  Last year I spent a total of $6,854.89 from that category for everything from aspirin to one-time dental surgery, and the category balance bounced around between a starting $5,000 high and a $3,000 low at end of year. I used my credit card for as much as I could for a few points, but always from an adequately funded category.

      Had the expenses been greater, the insurance company slower in issuing reimbursements, or something go wrong with the interpretation of what percentage qualified for reimbursement, I would have simply moved more money into the category from my 6-month emergency fund.

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  • jestarr said:
    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:

    1. Categorize outflows and inflows to Medical
    2. 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.

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      • jestarr
      • jestarr
      • 8 mths ago
      • Reported - view

      dakinemaui Would the simpler approach be to simply categorize medical expenses and medical reimbursements separately?  I could budget the average for medical bills, and then use the move money tool to fund medical bills when I get reimbursed? 

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      • dakinemaui
      • dakinemaui
      • 8 mths ago
      • Reported - view

      jestarr No, the simpler approach is the offset category, in which you budget enough to cover the bills up front, then the reimbursement transaction automatically fills that category back up so it's ready for subsequent bills. It's simpler because you don't have to move money.

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