Paying for Healthcare: City Benefits

Tempe offers two different programs that are designed to help cover medical expenses, Mediflex and individual HRAs. Unfortunately, due to confusing terminology it can be difficult to understand how to best utilize them. This guide is meant to help you understand the different offerings, what they cover, and how to use them. Please keep in mind that these may change on a regular basis: please consult the Bridge for the most recent programs and requirements.

Mediflex

All employees eligible for medical insurance with City of Tempe will received $53.26/month ($639.06/year) in funds deposited to individual Mediflex medical accounts. This money may be spent on any IRS-approved medical reimbursements for out-of-pocket expenses not covered by your insurance. Employees must pay for the items or procedures and then submit documentation to receive reimbursement on a future paycheck. Documentation must be submitted within 18 months of item purchase or appointment date. Items like prescription drugs, glasses, first aid kits, hearing aids, pregnancy tests, and misc doctor fees not covered by insurance are examples of items or fees covered by Mediflex.

Allergy medications, cold medicine, joint support, nasal strips, nicotine patches, Pedialyte, and cough drops are examples of items that could be covered by Mediflex but you will need to provide documentation that these are things prescribed by your medical provider. Cosmetics, weight loss foods or supplements, toiletries, and missed appointment charges are not things covered by Mediflex

(A complete list of covered items can be found on the Bridge. You can check your Mediflex funds at any time by looking at your most recent paycheck on Peoplesoft HR. Unused Mediflex funds stay in an employee’s account year-to-year: employees do not need to do anything have these funds roll over. Healthcare Reimbursement Accounts (HRA)

Healthcare Reimbursement Accounts

Besides Mediflex funds, employees have an additional option to set aside funds for healthcare expenses. As part of the annual insurance renewal employees may opt to set aside a small amount of money each paycheck ($5/check to $109/check) to save in an HRA. The benefit of doing this is that the funds are not subject to state or federal income tax so you can potentially save hundreds of dollars on your tax bill and free up money you would normally spend on healthcare expenses anyway. The downside is that you have less flexibility with this account than you do with your personal funds and that only $570/year can be carried over year-to-year. Any additional funds are forfeited so you need to be diligent and use as much as you can before the end of the plan year. This may seem daunting, but as long as you start the year by paying for medical expenses with the HRA and only transition to using the Mediflex program at the end of the year you shouldn’t run into any forfeiture issues. Please note that

Health Reimbursement Accounts (HRAs) are also sometimes called Flexible Spending Accounts (FSAs). HRAs are a specific type of FSA: besides healthcare, Tempe also offers childcare FSAs known as Dependent Care Spending Accounts.  Items like prescription drugs, glasses, first aid kits, hearing aids, pregnancy tests, and misc. doctor fees not covered by insurance are examples of items or fees that an HRA will reimburse Allergy medications, cold medicine, joint support, nasal strips, nicotine patches, Pedialyte, and cough drops are examples of items that could be covered by your HRA but you will need to provide documentation that these are things prescribed by your medical provider. Chapsticks, weight loss foods or supplements, toiletries, and missed appointment charges are not things covered by your HRA.

A complete list of covered HRA items is available on the Bridge. Unlike the Mediflex program, employees may opt to pay for expenses on-the-spot with an HRA debit card that links directly to one’s HRA account. This can be used just like a debit card when paying for doctor’s visits or medication. That said, you may need to submit additional documentation after payment if Allegiance believes the expense was not HRA-eligible. The other option is to pay for every expense yourself and then request reimbursement from Allegiance. 

The complete rules and requirements can be found on the Allegiance portal.

UAEA encourages all employees to routinely check both their Mediflex and HRA account balances. Make sure you know at all times how much you have available to cover medical appointments and how much (if any) you’ll need to spend to not lose any of your HRA funds at the end of the year.