HRA & reporting medical expenses

[Stephen1]

What is the name of your state?
Washington State

Health Reimbursement Arrangement (HRA) and claiming of medical expenses on Federal tax return.

Through my employer we signed up for a Medicare Advantage plan that includes a reimbursement to us of $200/month. There are other Medicare Advantage plans that do not include a HRA. The premiums are the same – the coverages are different. The full premium is deducted from my retired pay. Separately we receive the $200 reimbursement through a company associated with the medical plan. We receive this reimbursement due to our payment of monthly premiums and not for specific medical procedures. I understand that the HRA is not taxable income to me.

Our tax return shows two medical expense amounts:

• the premiums we paid (this comes from the 1099R, does not reflect the reimbursements, and not modifiable by us), and
• other allowed medical expenses.

QUESTION: Am I correct that the ‘other allowed medical expenses’ should be reduced by the reimbursement amount?

It causes me to wonder what happens when the annual ‘other allowed medical expenses’ is less than the reimbursement.

 

[adjusterjack]

QUESTION: Am I correct that the ‘other allowed medical expenses’ should be reduced by the reimbursement amount?

That's how I would do it. But I'm just an amateur when it comes to taxes, though I have done my own for many decades even when they were complicated.

I would make a worksheet for the calculations that I would keep with my tax records if ever questioned.

Example:

$5000 other allowed medical expenses.
Less $2400 HRA
Result $2600 reported as other medical expenses.

It causes me to wonder what happens when the annual ‘other allowed medical expenses’ is less than the reimbursement.

$2400 HRA
Less $2000 other medical expenses.
Result -$400 reported as other medical expenses. Shown as ($400).

Our participating tax people will correct me if I am wrong.