[GNC] Tracking a health reimbursement arrangement

[Michael or Penny Novack]

On 6/3/2020 4:56 PM, Duncan Johnson wrote:
> Hello,
>
> I am new to this list. I have not quite seen an answer to my scenario in
> the archives that I've seen online, so thought I'd join the list and ask.
>
> I'm in the USA, and my employer offers a Dental/Vision health reimbursement
> account. Each year, the employer will reimburse up to $200 for each person
> in my family to use for dental/vision. When I use the benefit, I put the
> charge on a credit card, then submit a reimbursement form, and then the
> company writes me a check.
>
That's one way to do it.

The decision on "best way" has to be made by each person and depends on 
exactly what information they want to be readily available. I am also in 
a similar situation PLUS have certain medical/dental/eye reimbursements 
from insurance as well as an HSA.

Let's suppose that I wanted (like you) not to have reimbursements appear 
as income (they aren't) BUT also wanted to know actual medical expenses 
before reimbursement << there could be good reason for this -- making 
decisions for a future year >> Then I might have a parent in expenses 
"out of pocket medical" and under it "pre-reimbursement" with children 
for medical, dental, etc. and then a "reimbursements" which would be a 
contra account << credited for reimbursements>>

Then I have an account that shows what the actual medical expenses were 
(and how broken down by category) plus an account (that top parent) 
showing "out of pocket" expense for medical (after reimbursement) plus 
what the actual medical expenses were.

The key thing here is understanding that "income" and "expense" are both 
temporary accounts of fundamental type equity. They differ from each 
other only in what their NORMAL balance would be,  debit or credit. 
Identification of these accounts as "income" or "expense" is only to 
place them in the P&L Report.

Michael D Novack