Do I get reimbursed from my HSA for amount applied to the deductible or the actual amount paid?

Question

My health plan (Cigna) through my employer is a HDHP that comes with an HSA (through HSABank). When somebody in my family gets medical services, they "bill" the insurance, which tells the medical provider how much they think I should pay based on their contracts and my deductible, the health insurance applies that amount toward my deductible, and the medical provider bills me. The theory is that I contribute to the HSA via payroll deduction to be able to pay the deductible with pre-tax dollars, and get reimbursed from that account for the amount I pay the medical provider.

What I'm trying to wrap my head around is what happens when the amount the insurance company says to pay doesn't completely line up with the bill from the medical provider. Many medical providers have a "prompt pay discount", often for a significant portion of the bill (ranging from 10% to 30% in my experience, depending on the provider). So to try to make this concrete, if I go to the doctor, their contracted price with the insurance might be $100, and the Explanation of Benefits from the insurance says that they've applied $100 to the deductible, but the bill from the doctor would only be for $80 since it includes a line on the bill for a $20 "prompt pay discount". Do I get reimbursed from the HSA for the full $100 (of what the insurance deductible is), or for the $80 I actually paid?

My intuition is that it would only be the $80 actually paid, because that's the actual expense I'm incurring. But then I'm rather confused by the design of HSABank's web site. When Cigna processes a claim, it shows up in the list of expenses that can be reimbursed on HSABank's site. I can click on the expense and get reimbursed the amount of the insurance deductible very easily. But there's no way to tell it to reimburse me only a smaller amount. If I wanted to only get the amount paid, I need to jump through hoops like marking the expense as paid without a reimbursement (to get it to be cleared from the list of items I can get reimbursed for), and then add it back manually as a separate medical expense. It's convoluted enough that I think I might be missing something and I could get reimbursed for the full amount that was applied to the deductible, since this seems like a pretty typical scenario and I would expect a place literally called "HSA Bank" to know how this is supposed to work. It feels like either me or HSABank is missing something.

Answer 1

You can't reimburse something that isn't paid. The doctor accepted $80 against $100, you paid $80, you reimburse $80.

Answer 2

Your problem with the interface is related to the fact that you are using the information in the explanation of benefits to get reimbursed. My experience has been that going the route of "reimburse me" vs. "pay my provider" always involves more paperwork and effort.

The issue with regards to the discrepancy with what you are paying your provider and what the insurance company is expecting you to pay, is one in which the insurance company should be concerned. The doctor is telling the insurance company they will be collecting a $100 but not admitting that you will only be spending $80. The insurance company is then over paying for their portion, and crediting you for expenses you really didn't have. Yes I know that in this transaction they are paying nothing, but it might question other bills from the doctor. Also that allows you to meet your deductible earlier in the year.

If you were to have the $100 sent from the HSA to the doctor, and then have the doctors office send you the $20 overage you would have to fill out the HSA paperwork and send them a check to get the $20 redeposited into the HSA.

What you are proposing is that you want to pull $20 from the HSA when there isn't a medical expense. That is now a tax issue. If you do this you must claim the $20 as a non-medical disbursement on the next income tax form you file.

Answer 3

When you do ask for $80 sent to either you or the provider, you get to keep that $20 extra for another expense later on. And, if you have the Archer MSA/HSA, then it will live on to the next year.

Money saved is money saved.

If you are trying to scam money out of the HSA/MSA... Don't. Consider that you can get reimbursed for mileage, tolls, non-prescription, medical equipment (wheelchair, blood pressure monitor), vision, dental, and a whole lot of stuff that isn't covered by the insurance plan - Including family (even parents and grandparents) who aren't on the original insurance plan. If the plan is an annual expired one, consider an extra trip to the dentist, or stocking up on medicine, medical equipment, etc.

About 2-3 times per year, I go through all medical expense claims, figure out how many miles it was, and submit a spreadsheet for mileage reimbursement. I also pull my toll logs, and submit tolls for the few places that I go on the toll road.

Check out the IRS's covered items list. https://www.irs.gov/publications/p502 You might be surprised at how much stuff is covered that isn't covered by insurance itself. (Bandages, Acupuncutre, home construction for a covered need, guide dog, lab fee, weight loss, etc.) .