[GNC] Advice needed, how to handle a medical reimbursement account...

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[GNC] Advice needed, how to handle a medical reimbursement account...

randix
I've been stumbling around with a particular issue for several years, and
figure I need to finally clean up how I enter the amounts in question, once
and for all... honestly, I'm stumped...

I do contract work all over the country. When I do contract work in lovely
(sarcasm) San Francisco, they have enacted a city ordinance that mandates
that in certain situations, employers in the City of San Francisco, are
required to set up a medical reimbursement account ("MRA") for employees--I
qualify. On a quarterly basis, I get notified that an employer has deposited
X amount in my medical reimbursement account. I can then submit my health
related expenses, and get reimbursed.

So here's what I've done in the past, and I realize there must be a better
way that is more clean...

1. I created an ASSET account for the MRA.  Actually I created several ASSET
accounts because each employer I do contract work for in San Francisco,
creates a separate MRA account for me.  Those accounts reflect my pending
credit balances in each MRA account.  If I didn't do that, my head would be
spinning to keep track of how much I have available in each MRA account (and
which one I should submit a claim to...)

2. I obviously have standard EXPENSE accounts set up for healthcare, broken
down by insurance, medical, dental, optical, etc.

So let's say that on April 1 I paid $100 to Doctor X.  I have a debit off
one of my checking accounts to pay that amount, and my expense account for
medical reflects the $100.  I then submit a claim reimbursement for the $100
from an MRA account.  When the claim is approved, they deposit the $100 in
my checking account, obviously that shows up as a credit/deposit.  The
offsetting entry is for the MRA account where the payment came from, so my
ASSET account for that MRA reflects the new balance remaining.

BUT... obviously I still have the $100 payment reflected in my expense
account for medical.  How do I get a credit into that account so it
accurately reflects the amount of my medical expenses for which I have not
been reimbursed?  I know this makes zero sense, but in a fantasy world I
would like to have credits be made simultaneously in both the ASSET MRA
account as well as the EXPENSE medical account.

Hope that makes sense... GnuCash suggestions to get me out of this
accounting jungle?





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Re: [GNC] Advice needed, how to handle a medical reimbursement account...

GnuCash - User mailing list
1. Pay the $100 .....credit chequing, debit medical expense.

2. Submit claim...debit MRA account,, credit medical account.

3. Receive reimbursement. Deposit into chequing account. Debit chequing, credit MRA.

Everything is now back to zero and you have a transaction history of what happened.

Sent from ProtonMail mobile

-------- Original Message --------
On 14 May 2018, 05:10, randix wrote:

> I've been stumbling around with a particular issue for several years, and
> figure I need to finally clean up how I enter the amounts in question, once
> and for all... honestly, I'm stumped...
>
> I do contract work all over the country. When I do contract work in lovely
> (sarcasm) San Francisco, they have enacted a city ordinance that mandates
> that in certain situations, employers in the City of San Francisco, are
> required to set up a medical reimbursement account ("MRA") for employees--I
> qualify. On a quarterly basis, I get notified that an employer has deposited
> X amount in my medical reimbursement account. I can then submit my health
> related expenses, and get reimbursed.
>
> So here's what I've done in the past, and I realize there must be a better
> way that is more clean...
>
> 1. I created an ASSET account for the MRA. Actually I created several ASSET
> accounts because each employer I do contract work for in San Francisco,
> creates a separate MRA account for me. Those accounts reflect my pending
> credit balances in each MRA account. If I didn't do that, my head would be
> spinning to keep track of how much I have available in each MRA account (and
> which one I should submit a claim to...)
>
> 2. I obviously have standard EXPENSE accounts set up for healthcare, broken
> down by insurance, medical, dental, optical, etc.
>
> So let's say that on April 1 I paid $100 to Doctor X. I have a debit off
> one of my checking accounts to pay that amount, and my expense account for
> medical reflects the $100. I then submit a claim reimbursement for the $100
> from an MRA account. When the claim is approved, they deposit the $100 in
> my checking account, obviously that shows up as a credit/deposit. The
> offsetting entry is for the MRA account where the payment came from, so my
> ASSET account for that MRA reflects the new balance remaining.
>
> BUT... obviously I still have the $100 payment reflected in my expense
> account for medical. How do I get a credit into that account so it
> accurately reflects the amount of my medical expenses for which I have not
> been reimbursed? I know this makes zero sense, but in a fantasy world I
> would like to have credits be made simultaneously in both the ASSET MRA
> account as well as the EXPENSE medical account.
>
> Hope that makes sense... GnuCash suggestions to get me out of this
> accounting jungle?
>
> --
> Sent from: http://gnucash.1415818.n4.nabble.com/GnuCash-User-f1415819.html
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Re: [GNC] Advice needed, how to handle a medical reimbursement account...

randix
Thanks for your suggestion.

Unless I'm misunderstanding, what you propose would work fine if one was not
interested in keeping track of the current balance(s) in the various MRA
accounts.  I need to keep track of the balances, as I need to know which MRA
account still has credit balances to which I can submit claims.

So, for example, using your suggestion...

1. On January 1, 2018, I'm notified that I have received $1,000 which has
been deposited in my XYZ MRA Account (keep in mind, these are not funds that
have been actually sent to me, rather they have been deposited in an account
set up in my name). I have an ASSET account in the name of XYZ MRA, so on
January 1, 2018, when notified of the deposit, I make a "deposit" in that
asset account in the amount of $1,000, and offset it with $1,000 in an
income account titled MRA income (so I can keep track of MRA funds that have
been credited to me in all MRA accounts).

2. On January 5, 2018, I pay out of my checking account the sum of $100.00
to Doctor 123, the offsetting entry is expense:health:medical

3. Using your suggestion, on January 10, 2018 when I file a claim for
reimbursement of the $100.00, I debit the ASSET XYZ MRA account, so it now
has a balance of $900.00, and credit the $100.00 in my
expense:health:medical account.  All good.

4. *The issue is what happens when I actually receive the reimbursement in
my checking account. *

4.1 You said, "Receive reimbursement. Deposit into checking account. Debit
checking, credit MRA". Not exactly clear what you meant, except that I get
you want a credit to end up in the MRA account.  But doing so, will bring
the balance of the MRA account back up to $1,000 when we know there's only
$900 in there...if that account had a zero balance to start with, your
debit/credit approach would work fine. But I need to have it track the
balances.

Suggestion?  My head is starting to spin :)






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Re: [GNC] Advice needed, how to handle a medical reimbursement account...

Christopher Lam
Hi Randix; you can try using the Business features and see if they work for
you, or use an intermediary 'asset'-type account (or more accurately,
account receivable).

1-Jan:
Income:MRA -$1000
Asset:MRA +$1000

5-Jan: visit Doctor123
Asset:Checking -$100
Expense:Medical +$100

10-Jan: submit claim (invoice the customer 'MRA')
Asset:MRA -$100
Asset:A/Receivable +$100

20-Jan: receive reimbursement (process payment)
Asset:A/Receivable -$100
Asset:Checking +$100

HTH

On 14 May 2018 at 10:07, randix <[hidden email]> wrote:

> Thanks for your suggestion.
>
> Unless I'm misunderstanding, what you propose would work fine if one was
> not
> interested in keeping track of the current balance(s) in the various MRA
> accounts.  I need to keep track of the balances, as I need to know which
> MRA
> account still has credit balances to which I can submit claims.
>
> So, for example, using your suggestion...
>
> 1. On January 1, 2018, I'm notified that I have received $1,000 which has
> been deposited in my XYZ MRA Account (keep in mind, these are not funds
> that
> have been actually sent to me, rather they have been deposited in an
> account
> set up in my name). I have an ASSET account in the name of XYZ MRA, so on
> January 1, 2018, when notified of the deposit, I make a "deposit" in that
> asset account in the amount of $1,000, and offset it with $1,000 in an
> income account titled MRA income (so I can keep track of MRA funds that
> have
> been credited to me in all MRA accounts).
>
> 2. On January 5, 2018, I pay out of my checking account the sum of $100.00
> to Doctor 123, the offsetting entry is expense:health:medical
>
> 3. Using your suggestion, on January 10, 2018 when I file a claim for
> reimbursement of the $100.00, I debit the ASSET XYZ MRA account, so it now
> has a balance of $900.00, and credit the $100.00 in my
> expense:health:medical account.  All good.
>
> 4. *The issue is what happens when I actually receive the reimbursement in
> my checking account. *
>
> 4.1 You said, "Receive reimbursement. Deposit into checking account. Debit
> checking, credit MRA". Not exactly clear what you meant, except that I get
> you want a credit to end up in the MRA account.  But doing so, will bring
> the balance of the MRA account back up to $1,000 when we know there's only
> $900 in there...if that account had a zero balance to start with, your
> debit/credit approach would work fine. But I need to have it track the
> balances.
>
> Suggestion?  My head is starting to spin :)
>
>
>
>
>
>
> --
> Sent from: http://gnucash.1415818.n4.nabble.com/GnuCash-User-f1415819.html
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Re: [GNC] Advice needed, how to handle a medical reimbursement account...

David Cousens
In reply to this post by randix
I think you are overcomplicating the issue by recording the appllication for
the refund from the MRA account. No money chnages hands at this point so you
could record paying  the Doctors bill as

Asset:Check                          Credit $100
Expense:Medical   Debit $100

When you receive the refund

Asset:Cheque      Debit $100
Asset:MRA                           Credit $100

If you really want to record applying for the refund, then the easiest way
to do it is to use the accounts payable structure.  The transactions then
become:

Asset:Check                          Credit $100
Expense:Medical   Debit $100

On claiming the refund:
Asset:Accounts Payable       Debit $100
Asset: MRA                                           Credit $100

On receiving the refund
Asset: Check                       Debit $100
Asset: Accounts Payable              Credit $100

Since Accounts Payable is usually associated with the business features, you
may want to give it another name e.g. Asset:MedicalRefundsClaimed  or
something similar, particularly if you use the business features for normal
invoices from suppliers. It is the accounts payable type structure that you
need to complete the cycle of transactions so you record having made and
received the claim.

Cheers

David Cousens




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Re: [GNC] Advice needed, how to handle a medical reimbursement account...

John Ralls-2
In reply to this post by randix


> On May 13, 2018, at 7:07 PM, randix <[hidden email]> wrote:
>
> Thanks for your suggestion.
>
> Unless I'm misunderstanding, what you propose would work fine if one was not
> interested in keeping track of the current balance(s) in the various MRA
> accounts.  I need to keep track of the balances, as I need to know which MRA
> account still has credit balances to which I can submit claims.
>
> So, for example, using your suggestion...
>
> 1. On January 1, 2018, I'm notified that I have received $1,000 which has
> been deposited in my XYZ MRA Account (keep in mind, these are not funds that
> have been actually sent to me, rather they have been deposited in an account
> set up in my name). I have an ASSET account in the name of XYZ MRA, so on
> January 1, 2018, when notified of the deposit, I make a "deposit" in that
> asset account in the amount of $1,000, and offset it with $1,000 in an
> income account titled MRA income (so I can keep track of MRA funds that have
> been credited to me in all MRA accounts).
>
> 2. On January 5, 2018, I pay out of my checking account the sum of $100.00
> to Doctor 123, the offsetting entry is expense:health:medical
>
> 3. Using your suggestion, on January 10, 2018 when I file a claim for
> reimbursement of the $100.00, I debit the ASSET XYZ MRA account, so it now
> has a balance of $900.00, and credit the $100.00 in my
> expense:health:medical account.  All good.
>
> 4. *The issue is what happens when I actually receive the reimbursement in
> my checking account. *
>
> 4.1 You said, "Receive reimbursement. Deposit into checking account. Debit
> checking, credit MRA". Not exactly clear what you meant, except that I get
> you want a credit to end up in the MRA account.  But doing so, will bring
> the balance of the MRA account back up to $1,000 when we know there's only
> $900 in there...if that account had a zero balance to start with, your
> debit/credit approach would work fine. But I need to have it track the
> balances.
>
> Suggestion?  My head is starting to spin :)
>

There’s an asymmetry in the account structure: Suppose that instead of a reimbursement scheme you had a bunch of MRA debit cards that you could pay your medical bills with directly.
What would be the “other” account in that case if not Expenses:Medical?

When you pay the doctor’s bill it’s money that the MRA owes you, so it’s not yet an expense. You need an asset account to collect that, we’ll call it Assets:Reimbursable:Medical. Paying the bill from your checking account is
    Assets:Current:Checking                        CR $100
    Assets:Reimbursable:Medical  DR $100

You also need an separate set of expense accounts to balance the MRA reimbursements, we’ll call that Expenses:MRA:Medical. Just for completeness let’s suppose that the MRA admins allow only $75 for this bill. The reimbursement transaction will look like:
    Assets:MRA                                             CR   $75
    Assets:Current:Checking         DR $75
    Assets:Reimbursable:Medical                   CR $100
    Expenses:MRA:Medical            DR  $75
    Expenses:Medical                    DR  $25


Regards,
John Ralls

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Re: [GNC] Advice needed, how to handle a medical reimbursement account...

John Ralls-2
In reply to this post by Christopher Lam
Don’t do this unless you are going to create customers for each MRA and then create invoices when you file reimbursement claims. GnuCash treats the A/R account type specially and doesn’t like it when you create splits in one outside of the business subsystem.

Regards,
John Ralls

> On May 13, 2018, at 8:04 PM, Christopher Lam <[hidden email]> wrote:
>
> Hi Randix; you can try using the Business features and see if they work for
> you, or use an intermediary 'asset'-type account (or more accurately,
> account receivable).
>
> 1-Jan:
> Income:MRA -$1000
> Asset:MRA +$1000
>
> 5-Jan: visit Doctor123
> Asset:Checking -$100
> Expense:Medical +$100
>
> 10-Jan: submit claim (invoice the customer 'MRA')
> Asset:MRA -$100
> Asset:A/Receivable +$100
>
> 20-Jan: receive reimbursement (process payment)
> Asset:A/Receivable -$100
> Asset:Checking +$100
>
> HTH
>
> On 14 May 2018 at 10:07, randix <[hidden email]> wrote:
>
>> Thanks for your suggestion.
>>
>> Unless I'm misunderstanding, what you propose would work fine if one was
>> not
>> interested in keeping track of the current balance(s) in the various MRA
>> accounts.  I need to keep track of the balances, as I need to know which
>> MRA
>> account still has credit balances to which I can submit claims.
>>
>> So, for example, using your suggestion...
>>
>> 1. On January 1, 2018, I'm notified that I have received $1,000 which has
>> been deposited in my XYZ MRA Account (keep in mind, these are not funds
>> that
>> have been actually sent to me, rather they have been deposited in an
>> account
>> set up in my name). I have an ASSET account in the name of XYZ MRA, so on
>> January 1, 2018, when notified of the deposit, I make a "deposit" in that
>> asset account in the amount of $1,000, and offset it with $1,000 in an
>> income account titled MRA income (so I can keep track of MRA funds that
>> have
>> been credited to me in all MRA accounts).
>>
>> 2. On January 5, 2018, I pay out of my checking account the sum of $100.00
>> to Doctor 123, the offsetting entry is expense:health:medical
>>
>> 3. Using your suggestion, on January 10, 2018 when I file a claim for
>> reimbursement of the $100.00, I debit the ASSET XYZ MRA account, so it now
>> has a balance of $900.00, and credit the $100.00 in my
>> expense:health:medical account.  All good.
>>
>> 4. *The issue is what happens when I actually receive the reimbursement in
>> my checking account. *
>>
>> 4.1 You said, "Receive reimbursement. Deposit into checking account. Debit
>> checking, credit MRA". Not exactly clear what you meant, except that I get
>> you want a credit to end up in the MRA account.  But doing so, will bring
>> the balance of the MRA account back up to $1,000 when we know there's only
>> $900 in there...if that account had a zero balance to start with, your
>> debit/credit approach would work fine. But I need to have it track the
>> balances.
>>
>> Suggestion?  My head is starting to spin :)
>>
>>
>>
>>
>>
>>
>> --
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>> _______________________________________________
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Re: [GNC] Advice needed, how to handle a medical reimbursement account...

Adrien Monteleone-2
In reply to this post by randix
I’ll start off with this: you really need to talk to a CPA.

Now, here’s how I would approach this...



The answer you are looking for involves both real and virtual entries, so you’ll need more accounts if you want to do this all in GnuCash. (you could alternatively track the MRA balance in a spreadsheet)

Where you place those accounts is somewhat flexible, and a matter of personal preference. (if you aren’t concerned with being a stickler, or required to follow certain accounting rules)

You already have an Assets:Cash, or Assets:Checking account, and an Expenses:Medical account.

The MRA is NOT an asset, as you have no claim to it, can’t control any funds in it, and can’t spend directly from it. It is a predetermined expense ALLOWANCE and thus a contra-expense account. Borrowing from business books, the analogy would be a Purchase Allowance account which offsets expenses or inventory as needed. As an individual, you could place this account right under expenses as its own thing, or place it under Expenses:Medical. You can either have a parent to collect all of the MRAs or just list them individually, that’s up to you.

For example:

Expenses:Expense Allowances:MRA XYZ
Expenses:Expense Allowances:MRA ABC

or

Expenses:Expense Allowance MRA XYZ
Expenses:Expense Allowance MRA ABC

or

Expenses:Medical:Expense Allowances:MRA XYZ
Expenses:Medical:Expense Allowances:MRA ABC

or finally,

Expenses:Medical:Expense Allowances MRA XYZ
Expenses:Medical:Expense Allowances MRA ABC

It’s up to you if you need that intervening parent account to track overall totals or not.


When the employer funds the MRA XYZ, you’ll need another special account, so do this:

Dr. Equity:Reimbursable Expenses
        Cr. Expenses:Medical:Expense Allowances:MRA XYZ


Alternatively, you could:

Dr. Revenue:Reimbursable Expenses
        Cr. Expenses:Medical:Expense Allowances:MRA XYZ


(I relabeled ‘Income’ to ‘Revenue', but it doesn’t matter in this context, I’ll get to why this placement in revenue/income works out later.)

As before, when you pay out of pocket:

Dr. Expenses:Medical
        Cr. Assets:Cash/Checking


When you request reimbursement from the allowance account:

Dr. Expenses:Medical:Expense Allowances:MRA XYZ
Dr. Assets:Receivables
        Cr. Expenses:Medical
        Cr. Equity/Revenue:Reimbursable Expenses

(If you have other receivables, you could create a sub-account or a different asset account labeled 'Reimbursements Pending’)


When you receive the reimbursement:

Dr. Assets:Cash/Checking
        Cr. Assets:Receivables


The advantage to placing the MRAs under the Expenses:Medical account is to see a roll-up total. If you don’t need that, they can be their own expense account/set of expense accounts.

It won’t matter if the offsetting account to funding (and receiving reimbursements from) the MRA is revenue/income because it always washes out with no net affect on your taxable income. (it’s a contra-revenue account balanced by a contra-expense account, which you can cancel out manually at the end of the year if you feel the need.)

If you think it might be a problem somehow, then place it under Equity instead. (which is acceptable, since expenses and revenue would close-out to Equity if you performed a close-books procedure)

With that in mind, to keep things neat and tidy, you might want to set up the MRAs under Equity as well, instead of under expenses, like so:

Dr. Equity:Expense Allowances
        Cr. Equity:Expense Allowances:MRA XYZ

(notice this would have a net zero effect on Equity)

If you had a need to maintain the MRA balance in perpetuity AND wanted to see a running total of all ‘draws’ against that allowance, instead of issuing a debit to the MRA, debit a sub-account of it labeled ‘draw’:

Dr. Equity:Expense Allowances:MRA XYZ:Draw
        Cr. Expenses:Medical

With this method, the actual MRA XYZ account never goes to zero, but the Draw sub-account which also never goes to zero but is the opposite balance, rolls up into it’s total to make it appear that way on the CoA and reports (depending on your options selected) AND you get to see a total draw from that account, but if these aren’t ongoing accounts or if you don’t have a need for such detail, just use the first transaction method I listed.

Questions?

Regards,
Adrien


> On May 13, 2018, at 9:07 PM, randix <[hidden email]> wrote:
>
> Thanks for your suggestion.
>
> Unless I'm misunderstanding, what you propose would work fine if one was not
> interested in keeping track of the current balance(s) in the various MRA
> accounts.  I need to keep track of the balances, as I need to know which MRA
> account still has credit balances to which I can submit claims.
>
> So, for example, using your suggestion...
>
> 1. On January 1, 2018, I'm notified that I have received $1,000 which has
> been deposited in my XYZ MRA Account (keep in mind, these are not funds that
> have been actually sent to me, rather they have been deposited in an account
> set up in my name). I have an ASSET account in the name of XYZ MRA, so on
> January 1, 2018, when notified of the deposit, I make a "deposit" in that
> asset account in the amount of $1,000, and offset it with $1,000 in an
> income account titled MRA income (so I can keep track of MRA funds that have
> been credited to me in all MRA accounts).
>
> 2. On January 5, 2018, I pay out of my checking account the sum of $100.00
> to Doctor 123, the offsetting entry is expense:health:medical
>
> 3. Using your suggestion, on January 10, 2018 when I file a claim for
> reimbursement of the $100.00, I debit the ASSET XYZ MRA account, so it now
> has a balance of $900.00, and credit the $100.00 in my
> expense:health:medical account.  All good.
>
> 4. *The issue is what happens when I actually receive the reimbursement in
> my checking account. *
>
> 4.1 You said, "Receive reimbursement. Deposit into checking account. Debit
> checking, credit MRA". Not exactly clear what you meant, except that I get
> you want a credit to end up in the MRA account.  But doing so, will bring
> the balance of the MRA account back up to $1,000 when we know there's only
> $900 in there...if that account had a zero balance to start with, your
> debit/credit approach would work fine. But I need to have it track the
> balances.
>
> Suggestion?  My head is starting to spin :)
>
>
>
>
>
>
> --
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Re: [GNC] Advice needed, how to handle a medical reimbursement account...

Adrien Monteleone-2
I forgot to mention, my inclusion of ‘Assets:Receivables’ was NOT the special A/R account used by the business features, but a manually created Asset account. (of type Asset, NOT of type A/R)

You could possibly use the business features instead as the other comments note, but you’ll have to do that request for reimbursement separate from the crediting of the original expense rather than all in one transaction.

Regards,
Adrien

> On May 13, 2018, at 10:33 PM, Adrien Monteleone <[hidden email]> wrote:
>
> I’ll start off with this: you really need to talk to a CPA.
>
> Now, here’s how I would approach this...
>
>
>
> The answer you are looking for involves both real and virtual entries, so you’ll need more accounts if you want to do this all in GnuCash. (you could alternatively track the MRA balance in a spreadsheet)
>
> Where you place those accounts is somewhat flexible, and a matter of personal preference. (if you aren’t concerned with being a stickler, or required to follow certain accounting rules)
>
> You already have an Assets:Cash, or Assets:Checking account, and an Expenses:Medical account.
>
> The MRA is NOT an asset, as you have no claim to it, can’t control any funds in it, and can’t spend directly from it. It is a predetermined expense ALLOWANCE and thus a contra-expense account. Borrowing from business books, the analogy would be a Purchase Allowance account which offsets expenses or inventory as needed. As an individual, you could place this account right under expenses as its own thing, or place it under Expenses:Medical. You can either have a parent to collect all of the MRAs or just list them individually, that’s up to you.
>
> For example:
>
> Expenses:Expense Allowances:MRA XYZ
> Expenses:Expense Allowances:MRA ABC
>
> or
>
> Expenses:Expense Allowance MRA XYZ
> Expenses:Expense Allowance MRA ABC
>
> or
>
> Expenses:Medical:Expense Allowances:MRA XYZ
> Expenses:Medical:Expense Allowances:MRA ABC
>
> or finally,
>
> Expenses:Medical:Expense Allowances MRA XYZ
> Expenses:Medical:Expense Allowances MRA ABC
>
> It’s up to you if you need that intervening parent account to track overall totals or not.
>
>
> When the employer funds the MRA XYZ, you’ll need another special account, so do this:
>
> Dr. Equity:Reimbursable Expenses
> Cr. Expenses:Medical:Expense Allowances:MRA XYZ
>
>
> Alternatively, you could:
>
> Dr. Revenue:Reimbursable Expenses
> Cr. Expenses:Medical:Expense Allowances:MRA XYZ
>
>
> (I relabeled ‘Income’ to ‘Revenue', but it doesn’t matter in this context, I’ll get to why this placement in revenue/income works out later.)
>
> As before, when you pay out of pocket:
>
> Dr. Expenses:Medical
> Cr. Assets:Cash/Checking
>
>
> When you request reimbursement from the allowance account:
>
> Dr. Expenses:Medical:Expense Allowances:MRA XYZ
> Dr. Assets:Receivables
> Cr. Expenses:Medical
> Cr. Equity/Revenue:Reimbursable Expenses
>
> (If you have other receivables, you could create a sub-account or a different asset account labeled 'Reimbursements Pending’)
>
>
> When you receive the reimbursement:
>
> Dr. Assets:Cash/Checking
> Cr. Assets:Receivables
>
>
> The advantage to placing the MRAs under the Expenses:Medical account is to see a roll-up total. If you don’t need that, they can be their own expense account/set of expense accounts.
>
> It won’t matter if the offsetting account to funding (and receiving reimbursements from) the MRA is revenue/income because it always washes out with no net affect on your taxable income. (it’s a contra-revenue account balanced by a contra-expense account, which you can cancel out manually at the end of the year if you feel the need.)
>
> If you think it might be a problem somehow, then place it under Equity instead. (which is acceptable, since expenses and revenue would close-out to Equity if you performed a close-books procedure)
>
> With that in mind, to keep things neat and tidy, you might want to set up the MRAs under Equity as well, instead of under expenses, like so:
>
> Dr. Equity:Expense Allowances
> Cr. Equity:Expense Allowances:MRA XYZ
>
> (notice this would have a net zero effect on Equity)
>
> If you had a need to maintain the MRA balance in perpetuity AND wanted to see a running total of all ‘draws’ against that allowance, instead of issuing a debit to the MRA, debit a sub-account of it labeled ‘draw’:
>
> Dr. Equity:Expense Allowances:MRA XYZ:Draw
> Cr. Expenses:Medical
>
> With this method, the actual MRA XYZ account never goes to zero, but the Draw sub-account which also never goes to zero but is the opposite balance, rolls up into it’s total to make it appear that way on the CoA and reports (depending on your options selected) AND you get to see a total draw from that account, but if these aren’t ongoing accounts or if you don’t have a need for such detail, just use the first transaction method I listed.
>
> Questions?
>
> Regards,
> Adrien
>
>
>> On May 13, 2018, at 9:07 PM, randix <[hidden email]> wrote:
>>
>> Thanks for your suggestion.
>>
>> Unless I'm misunderstanding, what you propose would work fine if one was not
>> interested in keeping track of the current balance(s) in the various MRA
>> accounts.  I need to keep track of the balances, as I need to know which MRA
>> account still has credit balances to which I can submit claims.
>>
>> So, for example, using your suggestion...
>>
>> 1. On January 1, 2018, I'm notified that I have received $1,000 which has
>> been deposited in my XYZ MRA Account (keep in mind, these are not funds that
>> have been actually sent to me, rather they have been deposited in an account
>> set up in my name). I have an ASSET account in the name of XYZ MRA, so on
>> January 1, 2018, when notified of the deposit, I make a "deposit" in that
>> asset account in the amount of $1,000, and offset it with $1,000 in an
>> income account titled MRA income (so I can keep track of MRA funds that have
>> been credited to me in all MRA accounts).
>>
>> 2. On January 5, 2018, I pay out of my checking account the sum of $100.00
>> to Doctor 123, the offsetting entry is expense:health:medical
>>
>> 3. Using your suggestion, on January 10, 2018 when I file a claim for
>> reimbursement of the $100.00, I debit the ASSET XYZ MRA account, so it now
>> has a balance of $900.00, and credit the $100.00 in my
>> expense:health:medical account.  All good.
>>
>> 4. *The issue is what happens when I actually receive the reimbursement in
>> my checking account. *
>>
>> 4.1 You said, "Receive reimbursement. Deposit into checking account. Debit
>> checking, credit MRA". Not exactly clear what you meant, except that I get
>> you want a credit to end up in the MRA account.  But doing so, will bring
>> the balance of the MRA account back up to $1,000 when we know there's only
>> $900 in there...if that account had a zero balance to start with, your
>> debit/credit approach would work fine. But I need to have it track the
>> balances.
>>
>> Suggestion?  My head is starting to spin :)
>>
>>
>>
>>
>>
>>
>> --
>> Sent from: http://gnucash.1415818.n4.nabble.com/GnuCash-User-f1415819.html
>> _______________________________________________
>> gnucash-user mailing list
>> [hidden email]
>> To update your subscription preferences or to unsubscribe:
>> https://lists.gnucash.org/mailman/listinfo/gnucash-user
>> If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information.
>> -----
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>> You can do this by using Reply-To-List or Reply-All.
>>
>


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Re: [GNC] Advice needed, how to handle a medical reimbursement account...

GnuCash - User mailing list
In reply to this post by randix
Hi Randix,

OK, I misunderstood the $1000.00. Here is how I would do it.....

1 You have set up asset accounts for MRA and checking account.
2. You have set up an income account for MRA income. (I'm not sure if that is treated as income in US but it's going to work)
3. You have set up a medical expense account.
4, now you need a fourth set of accounts for each MRA titled Claims in Process. It's a clearing account and in Australia would be treated as an asset.

The steps are....

1. on day 1 you are notified that $1,000 has been deposited in a holding account for your MRA , let's call it membership. So in Gnucash you debit the holding account and credit the income account, as explained above.

2. on day 2 you pay $100 to a doctor so you credit your checking account for $100 and debit the expense account, as above.

3. On Day 3, you submit a claim of $100 to the MRA . So in Gnucash you credit the MRA account and debit the MRA claim in process account (clearing account)

4. on Day 4 you receive $100 from the MRA. You debit the checking account and credit the MRA claim in process account.

At the end of all of this, your MRA will have $900DR, Your clearing will have $0, your bank will have $0, your medical expense will have $100DR and your MRA income will have $1000CR.

Accounting should always reflect what is actually happening and you have a history of what happened.

Just as you have a hierarchy of MRA accounts, you could have a hierarchy of MRA clearing and income accounts. At any time you can report on what your MRA account balances are, what is in progress and what income you have earned.

You could skip the income and clearing account hierarchies and just have one and identify the MRA ownership with a comment in the memo of the transaction. I wouldn't do that as the effort and disk space in unique accounts is insignificant and not hostage to the possibility of miskeying a memo comment and then chasing a miscoded transaction.

This is the way I keep books for my clients and is quite normal in Australia.

Hope this helps, email me if i have confused you and i'll try again

 


​Regards Peter

Sent with ProtonMail Secure Email.​

‐‐‐‐‐‐‐ Original Message ‐‐‐‐‐‐‐

On 14 May 2018 12:07 PM, randix <[hidden email]> wrote:

> Thanks for your suggestion.
>
> Unless I'm misunderstanding, what you propose would work fine if one was not
>
> interested in keeping track of the current balance(s) in the various MRA
>
> accounts. I need to keep track of the balances, as I need to know which MRA
>
> account still has credit balances to which I can submit claims.
>
> So, for example, using your suggestion...
>
> 1.  On January 1, 2018, I'm notified that I have received $1,000 which has
>    
>     been deposited in my XYZ MRA Account (keep in mind, these are not funds that
>    
>     have been actually sent to me, rather they have been deposited in an account
>    
>     set up in my name). I have an ASSET account in the name of XYZ MRA, so on
>    
>     January 1, 2018, when notified of the deposit, I make a "deposit" in that
>    
>     asset account in the amount of $1,000, and offset it with $1,000 in an
>    
>     income account titled MRA income (so I can keep track of MRA funds that have
>    
>     been credited to me in all MRA accounts).
>    
> 2.  On January 5, 2018, I pay out of my checking account the sum of $100.00
>    
>     to Doctor 123, the offsetting entry is expense:health:medical
>    
> 3.  Using your suggestion, on January 10, 2018 when I file a claim for
>    
>     reimbursement of the $100.00, I debit the ASSET XYZ MRA account, so it now
>    
>     has a balance of $900.00, and credit the $100.00 in my
>    
>     expense:health:medical account. All good.
>    
> 4.  *The issue is what happens when I actually receive the reimbursement in
>    
>     my checking account. *
>    
>     4.1 You said, "Receive reimbursement. Deposit into checking account. Debit
>    
>     checking, credit MRA". Not exactly clear what you meant, except that I get
>    
>     you want a credit to end up in the MRA account. But doing so, will bring
>    
>     the balance of the MRA account back up to $1,000 when we know there's only
>    
>     $900 in there...if that account had a zero balance to start with, your
>    
>     debit/credit approach would work fine. But I need to have it track the
>    
>     balances.
>    
>     Suggestion? My head is starting to spin :)
>    
>     --
>    
>     Sent from: http://gnucash.1415818.n4.nabble.com/GnuCash-User-f1415819.html
>    
>
> gnucash-user mailing list
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>
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Re: [GNC] Advice needed, how to handle a medical reimbursement account...

randix
GnuCash - User mailing list wrote
> Hi Randix,
>
> OK, I misunderstood the $1000.00. Here is how I would do it.....

Just wanted to do a quick reply that after spending many hours last night, I
basically followed what you laid out and have it working perfectly for my
needs, although I'm sure "pure accountants" will take exception.  It lets me
keep track of my various MRA accounts, and see the current balance in each
which is important to me; it also lets me keep track of total MRA deposits
received and MRA payments made, and makes sure that any MRA paid amounts are
credited on the various health related expense accounts.  Below is what I
did, which pretty much follows your suggestions.  Thanks again for your time
and patience (and everyone else as well) in helping me out on this one...

---------------------

I set up the following accounts:

ASSET:MRA_abc
ASSET:MRA_def
ASSET:MRA_ghi

Multiple accounts, one for each company that has funded a medical
reimbursement account for me, allows me to keep track of the current
available balance in each separate account

EXPENSE:Health:*MRA_Payments

Keeps track of total MRA payments from all MRA accounts for claims
submitted/processed

EXPENSE:Health:Insurance

Just one of my standard health expense accounts

INCOME:*MRA_Deposits

Keeps track of total MRA deposits made by the various companies in the
various MRA accounts

------------------

So assume abc company notifies me they have deposited $1000 in my MRA_abc
account on 5/1/18. Assume thereafter on 5/5/18 I pay $100 health insurance
premium from my checking, on 5/10/18 I file a claim for reimbursement from
the MRA_abc account for the $100 premium payment, and on 5/15/18 I receive a
direct deposit in my checking account for the claim.

1-May:
Income:*MRA_Deposits -$1000
Asset:MRA_abc +$1000

Balances: MRA_abc $1,000, *MRA_Deposits $1000

5-May
Asset:Checking -$100
Expense:Health:Insurance +$100

Balances: Checking account balance, Expense:Health:Insurance $100

10-May: submit claim
Asset:MRA_abc -$100
Expense:Health:*MRA_Payments +$100

Balances: MRA_abc $900, Expense:Health:*MRA_Payments $100

15-May: receive reimbursement
Expense:Health:Insurance -$100
Asset:Checking +$100  

Balances: Checking account balance, Expense:Health:Insurance $0, MRA_abc
balance $900




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