What are the Different Kinds of Reimbursement Accounts?

Reimbursement accounts are used to repay program participants who have made eligible expenditures. These accounts can be used to reimburse individuals for health-related costs. There are programs that are designed for the benefit of working individuals with expenses for the care of their dependents. Additionally, some people are granted access to accounts that are used for the repayment of educational expenses.

Health care reimbursement accounts provide funds for expenditures that are related to an individual’s medical needs and perhaps those of their qualified dependents. There are several types of these programs, so the manner in which they operate can vary. Some types of accounts may be funded by employers, while others may be funded by the employees themselves.

Reimbursable expenditures are not usually limited to medical procedures or prescriptions. Rather, these accounts can be used to repay a person for money spent on a wide range of items. These may include contact lens cleaning solutions, scar removal procedures, and Braille literature.

There are reimbursement accounts that allow working individuals to set aside a portion of their wages to pay for costs related to the care of their dependents. These dependent care accounts are commonly used for parents who have childcare expenses. They may, however, be used to care for other individuals, such as a disabled spouse or a mentally retarded sibling who is a legal dependent. In many cases, these funds are set aside from a person’s salary before taxes are deducted.

Educational reimbursement accounts exist to repay the costs incurred by students. These are usually used by employers to encourage their employees to further their education and perhaps to advance within the company. In many instances, these funds are subject to numerous stipulations. To begin with, some employers limit the course of study that a person may choose if she wishes to be reimbursed. An employee at a financial institution, for example, may not be repaid if she chooses to study sociology, but may be fully reimbursed for pursuing a degree in finance.

Some types of reimbursement accounts allow for rather prompt repayments. When the funds are being used for education, however, there may be an extended amount of time before a person is reimbursed. This is because another common stipulation is that a person must maintain a certain grade point average in order to qualify. In many cases, even if individuals are paid before their grades are available, they will be required to return the funds if they do not have acceptable grades.