Are pre-payments for deductibles reimbursed after the services are performed?

Specifically, most obstetrician's office require pre-payment of deductible for labor and delivery expenses. Is this pre-payment reimburseable after delivery even if in different calendar year. See example:
Prepayment in 2011
Election made for 2012
Birth of child in 2012
Prepayment from 2011 applied to birth in 2012
______________________________________
Will the prepayment be reimburseable in 2012 because that's when the qualifying event occurred?

Thank you.
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  • The expense is reimbursable in the year in which the expense is actually incurred.

    So in your example, the Prepayment in 2011 could be claimed in 2012 once the service was actually performed. Just to clarify, the pre-payment in 2011 would not be eligible to be reimbursed in 2011 as all that matters is the date of service, not when you are actually paying for the service (excluding the strange Orthodontic rules).

    The only caveat is that sometimes there are pre-payments that are actually in part tied to service provided before delivery (rare, but something to be aware of).

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  • Thank you for the quick response.

    I do have a follow up question. Where a portion of pre-payment is tied to prenatal services occurring in previous calendar year and remainder is applied to labor and delivery in current calendar year and the accounting reflects this, the labor and delivery portion would be reimbursable, correct?

    Example:
    Prepayment of $2000 in 2011
    $1000 of prepayment applied to prenatal in 2011
    Election made for 2012
    Birth of child in 2012
    Reminder of prepayment from 2011 applied to birth in 2012.

    Under this example would the $1000 remainder of prepayment applied in 2012 following birth be covered?

    Thank you in advance.
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  • Yes, under your example $1,000 of the prepayment (actually applying to service in 2012) could be applied to the 2012 FSA election.

    This can be tricky based on the type of billing statement that is provided so I would suggest asking the provider/doctor to explicitly say the dates and services that each payment is tied to (the often won't unless you ask).
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