Accounting Questions Regarding Insurance
David T.
sunfish62 at yahoo.com
Sun Feb 14 17:02:12 EST 2010
Every year it seems (right around tax time, naturally), I try to figure out a sensible way of handling the processing insurance reimbursements, so that it will work as close to painlessly as possible. So far, I haven't figured out a method for this.
Here is the basic set-up: I go to a doctor, and pay with a check. After some time, I gather up several such payments, and I submit them to my insurance company. After another stretch of time, the insurance company sends me a check for a portion of what I paid, and I deposit that check into my checking account.
What I am trying to figure out is how to enter these transactions in Gnucash such that I can track:
a) which payments need to be submitted,
b) what the insurance company still has, and
c) how much I can deduct on my taxes.
Here is how I am now thinking to handle this going forward:
1) When I pay the doctor, enter a transaction:
From-> Assets:Current Assets:Checking $100
To-> Expenses:Medical:Doctor $100
(this one is easy)
2) When I submit the payment to insurance:
From-> Expenses:Medical:Doctor $100
To-> Assets:Accounts Receivable $100
3) When the insurance company sends its check:
From-> Assets:Accounts Receivable $100
To-> Expenses:Medical:Reimbursed $70 [the amount of their check to me]
To-> Expenses:Medical:Doctor $30
(or possibly into a generic Unreimbursed?)
I am not sure if that makes sense, but here is my reasoning: when I send stuff in to the insurance company, it is like I've sent in a bill to them, for which I am expecting payment. Of course, it's a bill that they will apply their own discount to before paying, but the concept holds, I think. If I direct the unreimbursed amount back into the original account, I can see by account how much I have paid. If I use a generic Unreimbursed account, I would have to remember to transfer transactions that were not submitted to insurance in the first place, which is something I wouldn't remember from moment to moment.
I really appreciate it if anyone with more accounting knowledge could tell me if I am barking up the right tree--or even if I am in the right forest to begin with...
TIA,
David
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