Shannon Cavers of the Houston Divorce and Family Lawyer Blog has published several articles on reimbursement of children’s medical expenses. This is the third:
Many employees have access to pre-tax savings devices called Medical Savings Plans or Medical Savings Accounts. Through such plans, an enrolled employee participant may designate a portion of his/her pre-tax income to be deposited in an account designated for health care. One of the benefits is lowering the employee’s taxable income. Another benefit is saving for large ticket items such as annual deductibles, surgeries, braces, or other medical services which may not be covered by an insurance carrier.
I used to dislike such plans because withdrawing funds for reimbursement was too burdensome and paper-work intensive for the tax benefit. However, I have heard that many medical savings plans are much more user friendly these days, offering access to the deposited funds through a debit card.
For older children who take themselves to dental appointments or to the orthodontist, this may be a great vehicle for paying and tracking the child’s medical expenses.
For more information on such plans, speak to your human resources department or your CPA to learn more about the tax benefits.