The Medical Expense Reimbursement Account is one of the tax saving options available to The University of Tennessee employees through the Flexible Benefits Plan. The Medical Expense Reimbursement Account is generally beneficial to anyone who has predictable out-of-pocket medical expenses. There is a maximum contribution limit of $2,650.

Eligible Medical Expenses

As a general rule, any categories of expenses that could be deducted on an IRS Form 1040 for medical expenses, except insurance premiums, can be paid for with pre-tax dollars through the Medical Expense Reimbursement Account. You may file medical expenses for yourself, your spouse (if filing a joint tax return), and any other person you claim as a dependent on your federal income tax return.

The Medical Expense Reimbursement Account allows you to use tax-free money to pay for almost all medical expenses incurred by you and your family that are not already covered by an insurance policy. While everyone has such expenses, the attractiveness of the reimbursement account depends upon the amount of such expenses you and your dependents pay out-of-pocket each year. You may use the account for reimbursement of your co-payments, co-insurance and deductible amounts on dental and vision care not covered by insurance, prescription drugs, the costs of some elective procedures, and a host of other expenses.

Visit the eligible medical expenses table for a guide to what may and may not be covered.

A complete list is available in IRS Publication 502 →, or log onto the Payflex website → for a listing.

Medical Expenses that are NOT ELIGIBLE:

The following items are not eligible for reimbursement under the Medical Expense Reimbursement Account:

  • Over the Counter Medicines are no longer eligible effective January 1, 2011
  • Premiums for health insurance coverage such as major medical, dental, vision, cancer, life, accidental death, disability, or hospital indemnity insurance
  • Health club dues or exercise programs for services not related to a particular medical condition
  • Nonessential cosmetic surgery
  • Bleaching or other forms of whitening of teeth or cosmetic dentistry
  • Diaper service
  • Funeral expenses
  • Household help
  • Advance reimbursement of future or projected medical expenses
  • Expenses incurred in a prior plan year and paid during the current plan year
  • Medical expenses claimed on your tax return
  • Marriage and family counseling
  • Massage Therapy to reduce stress or improve general help (it is only eligible if prescribed by a physician for a specific illness, injury, trauma or condition and is accompanied by a letter of medical necessity)

Over the Counter Medicines (OTC)

Effective January 1, 2011 over-the-counter drugs will no longer be reimbursable under the health flexible spending account (FSA), unless the drugs are prescribed by a physician.