Accounting Questions Regarding Insurance

[Michel Drescher]

Hi David,

I am not an accountant, but I think the way you described it you would
create an imbalanced account sheet: In transaction 3 you move $70
from "Assets:Accounts:Receivable"
to "Expenses:Medical:Doctor" ($30) and "Expenses:Medical:Reimbursed $70".

Instead, the $70 should be kept in the assets corner and credited to
"Assets:Current Assets:Checking".

Cheers,
Michel

On 14 February 2010 23:02, David T. <sunfish62 at yahoo.com> wrote:
> 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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