How to setup a Health Care Reimbursement Account

[Derek Atkins]

Yes, this is correct.  Your loack of a direct linkage is the same
issue as inventory or chargeback expenses -- there's only an
out-of-band linkage between the expense and the "income".

-derek

Milind Kamble <mbkads at yahoo.com> writes:

> Accounting Gurus:
>    I searched the mail archives but found no
> discussion on this topic. I would like to setup a
> Health Care reimbursement account (also known as
> Flexible Spending Account in the US) to track paycheck
> contributions to this account, and subsequent
> reimbursements.
>
> The way I see it (I might not be accurate from an
> accounting lingo perspective) is:
>
> For every pay-period, a fixed amount gets deposited
> into the HCRA. So HCRA would be an asset account. For
> every paycheck, I would have
> Cr Income, and Db Assets->Checking, Db Assets->HCRA
> (and others)
>
> When I visit a doctor, I pay copay by credit card. So
> for this transaction, I have a Cr entry for
> Liability->CrCard  and Dr entry for
> Expenses->Medical->Reimbursible
>
> When I payoff the credit card balance from my checking
> account, I have a Cr entry for Assets->Checking and a
> Dr entry for Liability->CrCard
>
> Ultimately when I have a sizeable number of
> transactions in Expenses->Medical->Reimbursible, I
> send off a expense-report like form to the account
> maintainer and get a check from them. That leads to
> Db entry in Asset->Checking and Cr entry in
> Asset->HCRA
>
> Question: would this be the correct setup?
> I am unsure, because there is no linkage between
> transactions in Expenses->Medical->Reimbursible and
> Assets->HCRA
>
> TIA.
>
> Milind
>
>
> 		
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-- 
       Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
       Member, MIT Student Information Processing Board  (SIPB)
       URL: http://web.mit.edu/warlord/    PP-ASEL-IA     N1NWH
       warlord at MIT.EDU                        PGP key available