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OK. I have to make an announcement. One that I am sure will shock many of you out there who know me personally and read my blog. It is a little embarrassing, however, I went to the dentist today….for the first time in twelve years!!
I know – somewhat gross, but I brush and floss daily and had perfect teeth as a child. Not a big issue in my books. I was one of those kids everyone hated, where I never needed braces and everything just grew in perfectly – even my wisdom teeth. I probably should ask my father for some money in lieu of costs associated with braces, considering how much my perfect dental history saved him. However, I have been scared of dentists and the idea of having someones fingers poking my teeth, so I resisted until I got an accidental chip on my front tooth.
The first thing that I encountered when booking my appointment was the famous line – “do you have insurance?”. I said yes and booked my appointment. Since it had been a while, I had to get the full exam with those creepy x-rays and the counting of the teeth. The dentist was a wonderful woman and I would highly recommend her to anyone in and around Oakville, Ontario (e-mail me if you want the details). Given the painless experience, I was ready to get all kinds of treatments like whitening and a guard to stop me from grinding at night – I deal with allot of stress these days managing the upcoming re-launch of Gremolata. The dentist said, these are all great things, but they will not be covered by insurance. That is when I said “no problem, I have a health and welfare trust”. She looked at me funny and that is when sales man James took over.
I explained to her about the Health and Welfare Trust I have with Benecaid and that I had a reserve of funds I could use for exactly this type of expenditure. She noted that these costs can be substantial but I told her that I had more than enough to cover it. She was impressed. After all, how many clients walk into a dental office and say, give me the works! Well, those with an HWT would.
I think this is why I am so passionate about Health and Welfare Trusts. I don’t feel limited to a plan. I can get the basic care I need but also invest in the things that will make me feel better about myself – such as brilliant white teeth or a new nose (the later requires more thought). All joking aside, it is a great feeling to know that you have the tax-free money to spend when and how you want to. It also makes me think how impressed every employee would be with the company they work for if they had access to the same HWT as I did.
Oh, and for the record. No cavities and a healthy smile was the diagnosis I received! Whew!
I have spent a few months looking at claims and how people submit them into Benecaid, where I currently work. Submitting manual claims can be a very frustrating experience for those not living inside the insurance world. Paperwork, mailing addresses, originals versus copies – it can be a real headache. That being said, I thought I would share some of the biggest mistakes people make when submitting claims to an insurance company.
1. Original Receipts & Prescriptions
This is by far the biggest issue for customers. You should always send the original receipt and if you have it, a copy of the prescription to validate that it was prescribed by a doctor. The second item isn’t always necessary but is handy to ensure faster processing. If you want a copy for your records, keep the photocopy AND NOT the original. The insurance provider or HSA adjudicator will question the copy and most likely return it to you. After all, if they received a copy, how many other companies did you send the copy to?
2. Use The Right Form
With so many forms, it is hard to stay on top of which one to use. Every insurer or HSA provider should have the forms readily available on-line. If you are unsure which form to use, your best bet is to call your insurer or HSA adjudicator once a year and ask. Download and print a couple and keep them on file.
3. Complete the form in FULL
Many insurers have standardized forms designed to be scanned to retrieve the data and convert it into an electronic format. This technology is used to speed up the processing and is designed to be a benefit for the customer. When you do not complete the form in full, or enter information in the wrong place, it can cause problems in scanning and slow-down the adjudication of your claim. Take your time and complete the form in full. Most insurers and HSA adjudicators have reference guides you can ask for if you need help…just ask them for a copy.
4. Send Your Claim to The Right Address
Be sure to send your original claim and the correct completed form to the right place. Many insurers and HSA providers have more than one location for adjudicating claims. If you are unsure of where to send your claim, call their customer care department before you send it. It can save you problems down the road.
5. Coordination of Benefits
If you are already covered under another plan (i.e. company plan or spouse’s plan), the insurer will most likely ask you to submit your claim to the first insurer before you submit it to them. They will cover anything not covered from the other plan up to your maximum. If you have an HSA, it is always wise to send the claim to your insurer first. When you receive the claim back, the difference can be taken out of your HSA. To do this, you simple forward the original Explanation of Benefit (EOB) received from the original insurer with a claim form. The HSA adjudicator will take the amount unpaid from your insurer and reimburse you the difference from your HSA. While it is a complex process, it does save you money in the long-run from your HSA. After all, if you already have insurance through another source and it is not costing you anything, you should take advantage of it!
These tips are not going to ensure that every claim is paid but it will help to make the process faster and ensure proper adjudication. If you follow these tips, you should see a significant reduction in follow-up with your insurer or HSA to find out…”Why won’t you pay my claim?”
The recent federal budget got the whole Canadian insurance world up in a tizzy. While most people did not notice the entry, everyone in the benefits consulting and insurance world started freaking out over one paragraph. It wasn’t in the budget speech. Rather, it sat in the bowels of the 416 page budget details document. So what could have gotten everyone so upset? Well, on Page 282, Appendix 4, the following was documented…
Budget 2008 also proposes to clarify the METC provisions regarding the eligibility of drugs and medications.
Currently, drugs, medications and other preparations are eligible for the METC when they are both prescribed by a recognized medical practitioner (or a dentist) and recorded by a pharmacist. These two requirements are intended to ensure that only costs for substances not generally available to the public and required for medical reasons receive tax relief. However, recent court decisions have interpreted this measure to include, in some cases, the cost of vitamins, supplements and drugs that could otherwise be purchased without a prescription. Such an interpretation goes beyond the policy intent of the METC.
Budget 2008 therefore proposes to clarify the wording for eligible drugs and medications to ensure that those that may be purchased without a prescription remain ineligible.
Holy Cow Batman! Do you mean that I cannot claim Flintstone Vitamins from my HSA? I actually need to have a prescription from a doctor and actually see the pharmacist to get something a little more legitimate? What could the insurers and consultants be so upset about?
Well, they believe that this wording will eliminate ALL over the counter prescriptions. This is because there is a disconnect on what the government is trying to achieve and what the consultants and insurers understand as “the realm of their industry”. The goal here is to stop sole-proprietors from buying over-the-counter (OTC) vitamins then claiming them as eligible expenses on the METC. The consultants and insurers are assuming that the wording will eliminate over the counter drugs completely and not what the federal budget suggests “Items without a prescription”. There is a difference.
Yes, this may have some implications on certain health benefit plans and coverage. But certainly not anything to be too concerned with here. You can always assume that the CRA will look at each case with what is the best interest of CRA and whether the taxpayer (individual or corporate) acted in good faith given their interpretation of the rules. After all, they are not all evil monsters out to tax you to death. The problem here is that the wording regarding OTC drugs and the METC has been grey for far too long and has caused multiple headaches for sole-proprietors and CRA. So they want to clarify the rules.
Let’s just see what they come up with before everyone starts claiming that the sky is falling. PS – If you do get hit on the head be sure to see your Doctor first if you need some form of pain reliever – just to be safe!
Tax-free Savings Accounts (TFSA) were not the only thing announced during the federal budget this week. New allowances were made to the list of eligible claims in addition to some strong actions to be taken to tighten up the words and rules on prescriptions and vitamins. Go Flaherty, get tough with those supplement-poppin baby-boomers!
The budget approved the following items to be included as eligible expenses: altered auditory feedback devices for the treatment of a speech disorder; electrotherapy devices for the treatment of a medical condition or a severe mobility impairment; standing devices for standing therapy in the treatment of a severe mobility impairment; and pressure pulse therapy devices for the treatment of a balance disorder. Expenses for service animals specially trained to assist an individual who is severely affected by autism or epilepsy to cope with the individual’s impairment, was also added. Currently, the rules only recognize an individual who is blind, deaf or has a severe impairment that markedly restricts the use of the individual’s arms or legs.
Finally, the budget announced that it would revise the wording on prescription drugs. Currently, drugs, medications and other preparations are eligible for the Medical Tax Credit when they are both prescribed by a recognized medical practitioner (or a dentist) and recorded by a pharmacist. However, recent court decisions have interpreted this measure to include, in some cases, the cost of vitamins, supplements and drugs that could otherwise be purchased without a prescription. To clarify the issue, the government is going to clarify the wording for eligible drugs and medications to ensure that those that may be purchased without a prescription remain ineligible.
This is good news! By reinforcing the rules, the government is taking a serious stance on the importance of the Medical Tax Credit as well as Health Spending Accounts. This should be a taken as stern message to some of the fly-by-night HSA providers to shape up your adjudication and HSA knowledge, or ship out!
OK, I had to do it. Three days into my blog and I have to write something about a celebrity. Anyways, I woke up this morning and the first thing I heard on the radio was Britney Spears being admitted to a hopsital after being rushed from her home by ambulance and escorted to Cedars Sinai by nine police cars. That’s right folks, nine police cars! While it did make for some interesting morning news with my Starbucks, the work-a-holic in me said…“Yikes…Who is paying the bill for this one?” .
If I was responsible for Ms. Spears’s personal health insurance policy, I would have been fired long ago. Of course, if she is financing this personally, the cost must be obscene! I did some research, and here is what this could have cost using some basic fee guidelines in California and advice from a doctor in Palo Alto…
Getting There…
- Cost for ambulance transportation varies by distance, typically $800-$1000
- Cost for police escort if available, no charge unless asked for and contracted as a special service in advance.
At the Hospital…
- For urgent, comprehensive evaluation by emergency physician: $500
- Hospital charges for nurse evaluation, use of the room: $500
- If an IV is needed: +$250
- Drugs vary widely and depend on whether the doctor orders a tradename drug or a generic preparation: $20 – $200 for drugs
- Observation time in the emergency department : $250/hour
- Evaluation by Psychiatrist in the ED: $300
- Costs for Psychiatric evaluation and counseling for 2-3 days…If an inpatient, then $250 per session for the psychiatrist
- Costs for private hospital room for 2-3 days, varies widely by hospital — $1,000-$3,000/day for the facility charges
- Average inpatient hospital stay in ICU ~ $8,000-10,000/day
Now, listen clearly. I am not saying that this is what she will experience over the next few days. However, if this was your typical visit to the hospital and you underwent what the media is reporting over a period of 2 days, then you would be looking at a bill somewhere between $29,000 and $32,000 USD!!!
My point here is that healthcare in the US is expensive, even for a celebrity. The second thing I would like to remind Canadians about is that not all of the bogus bill outlined above would be covered by medicare here in Canada. Many of these items, including private hospital rooms and even ambulance transport, would have been billed to your private insurance (if you had any). And if this was claimed through your insurance, you can be certain that by renewal time, you would receive some form of premium increase.
What would be more sensible? An HSA using tax-free dollars of course. All of the items listed above (excluding the police car envoy) would be covered as eligible expenses through an HSA in Canada (and the US). Even if the funds in the HSA did not cover the total amount, the claim could be rolled over to the next year and future funds used to reimburse Ms. Spears as they became available. But hopefully, this will be the last time she needs to endure such an expense.
In all seriousness, I certainly hope this is the last time I wake up to such a sad story about something so preventable.
For Canadians, the rising loonie has been a big news story for the past few months. Consumers are flocking south to take advantage of the at-par currency to buy cars, stereos, TVs, and clothing. But what about healthcare?
I was chatting with a friend of mine the other day and we were discussing the cost to attend some US-based high-profile wellness spa – you know, the ones the celebrities frequent. They had done some research and was surprised at how the cost was really no more than a basic all-inclusive stay at a 5-star resort. It got me thinking…“Is a week in Arizona at a medical wellness spa an option for me in 2008?”
I have a health spending account, actually, a Health and Welfare Trust (HWT) through Benecaid. I have barely used it (with the exception of some massage therapy and a new pair of glasses) and have saved up some considerable money. I certainly have enough for a week at Canyon Ranch or another medically licensed spa – should I take advantage of it?
A year ago, I would never have thought of spending my money on such a trip. However, with the recent rise in the loonie, I am seriously considering it. Given that the programs at these spas are overseen by medical professionals and that the transportation to and from the location would be eligible medical expenses, I am starting to think a medical getaway is right for me. I work hard and never take the time to look after myself. A week away focused on my physical and mental health and well-being might be a good choice in 2008.
I wonder how many other HSA holders are thinking the same thing?
Every time I meet with a financial advisor, a lawyer, an accountant, or a potential Benecaid client, I am always asked the same thing…
What is an eligible claim?
Well, many different providers of HSAs have different interpretations on what CRA is trying to say. Medical expenses eligible to be paid out of the HSA (HWT or PHSP) are expenses which would otherwise qualify as medical expenses within section 118.2(2) of the Income Tax Act. The list is pretty long when you think about ALL the varying practitioners, procedures, and conditions out there. So here are a few simple rules to make it easier…
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Treatments MUST be performed by a Licensed Medical Practitioner.
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Products must be prescribed by a Licensed Medical Practitioner AND dispensed by a Licensed Pharmacist or Licensed Medical Practitioner.
Important!! Don’t forget that each province sets the guidelines as to what a Licensed Medical practitioner is! If the health profession has a college established granting registration numbers and certificates to each practitioner (like doctors, dentists, etc..), then chances are they are licensed.
Equally Important!! The Licensed Medical practitioner must be licensed in the jurisdiction of the HWT or PHSP account holder. What does that mean? Well, if you live in Alberta (where massage therapy is not regulated by a college) and visit Ontario (where it is considered a licensed medical practitioner), your claim should be rejected by your HSA administrator. Why? Because the service was not considered an eligible expense in your home jurisdiction. Think about that before your next holistic accu-aquatherapy-meditation trip to Bora Bora!
HSA Information for Canadians 