Medical Expenses and Calculations
Webinar – April 15, 2015 Presented by Margaret Streich and Katherine Helgerson
Overview
Review
Medical Calculation Policy
Medical Expense Calculation Form
Verification Hierarchy
Tips and Best Practices
Review
Head, Co-Head, or Spouse must be disabled (HUD’s definition – 24 CFR 5.403) or over the age of 62 Disability status only needs to be verified once (unless there is reason to believe the disability status has changed) Medical threshold is 3% of the annual income See page 144 of Admin Plan
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Review
Refer to the IRS Publication 502 Medical and Dental Expenses when determining
allowable medical expenses
Expenses not approved by the IRS need to be verified as “medically necessary” by a medical professional on an annual basis (OTC medications, vitamins, etc.)
Medical marijuana is never an allowable medical expense
Medical Calculation Policy
Preferred Method: Use total cost of previous 4 months to anticipate expenses for the next 12 months (one-time expenses, such as eyeglasses or dental procedures, can be included in the calculation) Other Calculation Method: As a reasonable accommodation, expenses based on historic data (actual out-of-pocket expenses paid in the past 12 months) can be used Interims can be completed for unanticipated medical expenses incurred between annuual reexaminations See Page 145 of DOH Administrative Plan
Medical Calculation Policy
Participants are encouraged to keep copies, records, and/or receipts showing proof of payment for medical expenses incurred since their last annual reexamination Written 3rd Party Verification = Original Document Review (preferred) Housing coordinator must view and photocopy original receipts and printouts Redact disability-related and other sensitive data from verifications
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Medical Expense Calculation Form
Encourage participants to retain the medical expense receipts and printouts used to calculate their medical expense deductions (should they dispute the finalized calculations) It is okay to give participants a copy of the medical expense calculation worksheet Retain medical expense calculation worksheet and documentation in tenant file Redact disability-related and other sensitive data from verifications
Medical Expense Calculation Form
Medical Expense Calculation Form
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Medical Expense Calculation Form (Elite Data Entry)
Verification Hierarchy
Medical expense verifications begin at Level 4 on the Verification Hierarchy Level 4 = Written Third Party (Original Document Review) Level 3 = Written Third Party (form) Level 2 = Oral Third Party Level 1 = Tenant Declaration Housing Coordinators are expected to obtain the highest level of verification available, starting at the top of hierarchy and working your way down
Verification Hierarchy
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Verification Hierarchy
For over the counter (OTC) medications, vitamins, etc., verification of necessity by a knowledgeable professional must be in the file For expenses related to a service/companion/therapy animal, the original verification that the animal is necessary is required to be in the file For more information about verifying medical expenses, see page 192 in the Administrative Plan
Typical Medical Expenses
Services of doctors and health care professionals Medical insurance premiums Prescription/non-prescription medicines (prescribed by a physician) Dental expenses, eyeglasses Transportation to treatment (cab or bus fare, mileage) Monthly payment on accumulated medical bills
Tips and Best Practices
Verifications must have tenant’s name printed on them (this does not apply to receipts for OTC medications, vitamins, etc.) Verifications must show proof that payments are being made, not just the balance due Use the “Expense Time Frame” as a cut-off time for new expense at annual or interims Do not count same expense two years in a row
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Tips and Best Practices
If PHA/agency receives a verification document that provides a person’s diagnosis or details of treatment for a disability or medical condition, PHA/agency should redact or dispose of it (if redacting is too difficult). Note in the file that the expense has been verified, the date verification was received, and name and address of knowledgeable professional who sent the information.
Resources and References
IRS Publication 502 – “Medical and Dental Expenses” – http://www.irs.gov/publications/p502/
DOH Admin Plan – Chapter 6 part II-D.(pgs. 144146 and Chapter 7 part IV (pgs. 192-194)
See Elite Manual Chapter 3 for data entry
QUESTIONS?
(Contact your DOH Contract Manager)
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Tip of Day: Medical Expenses
DOH has a Medical Calculation Form that helps calculate and organize expenses for your file documentation. This form acts as a handy summary sheet that can help you organize and see at a glance all of the medical expenses provided to a family. This form is attached and can also be found on the DOH website (http://dola.colorado.gov/doh-forms). This form is not required but rather provided as a tool that you are free to begin using it if you like. DOH policies related to medical expenses can be found in the Admin Plan on page 144. verification of medical expenses can be found on page 192.
Information on
Here is a quick review of some important medical expense information:
Who can claim medical expenses? In order to be eligible to deduct medical expenses, the Head, Spouse, or Co-Head must be 62 years of age or older, or a person with disabilities (HUD definition – 24 CFR 5.403) How often do I have to verify that a person is a person with a disability? Disability Status only needs to be verified one time. You do not need to re-verify it annually. What counts towards the rent calculation? The medical threshold is 3% of annual income. This means that HUD expects people to pay 3% towards medical expenses and that only expenses in excess of 3% are deducted from income. How do I know what is an eligible medical expense? DOH uses the current IRS Publication 502 when determining allowable medical expenses. What do I do if an item is not listed as eligible in IRS Publication 502? Items not listed in IRS Publication 502 will need to be verified annually (or noted to be of ongoing/continued need) by a medical professional What do I need in my file to verify medical expenses? View and photo copy original receipts and/or printouts from doctors, pharmacies etc. Can I just take a bill as verification? No, a bill is not proof of medical expenses. Expenses must already have been realized in order to be counted. For example, you do not count the $5,000 hospital bill, you count the $25 per month that the individuals pays on the $5,000 hospital bill. Are there any exceptions that would not allow us to give a deduction for expenses? Expenses cannot be granted if the expense is being paid for or reimbursed by any other source. What do I do if the information provided as verification has sensitive medical information on it? Be sure to redact any information that may contain sensitive medical information. If there is no way to redact the information, remove the verification from the file and replace it with confirmation that you reviewed the document but removed it due to its sensitive nature.
Be sure to not count the same expense two years in a row. The date fields on the form will assist with this.
VERIFICATION OF MEDICAL EXPENSES Housing Choice Voucher Program
XX-XXX-
RE: Applicant/Participant
Last four of Social Security Number
TO WHOM IT MAY CONCERN: The applicant/participant is applying for housing assistance subsidized through the Department of Housing and Urban Development. Federal regulations require that all income, expenses, preferences and other information related to eligibility must be third-party verified. Please complete this form as it applies to the above named family. Be assured that your reply will be kept confidential. Please provide the requested information within the next 10 days. If you have any questions, please contact: Housing Coordinator
Telephone Number
RELEASE OF INFORMATION: I hereby authorize the release of the information requested below: Signature of Head of Household
Date
Signature of Family Member (if Adult)
Date
Expense Type Physician Care
Dental Care
Prescriptions
Therapy
Hospital/Clinic Care
Medical Insurance
Eye/Vision Care
Other
Frequency of Expense: One time only weekly Cost per occurrence: $
monthly every 2 months other: Amount paid out-of-pocket in last 4 months: $
***Please provide a printout or ledger of the previous 4 months if available ***
Signature of Verifying Party
Address
Printed Name
Title
Telephone #
Date
Fax #
Please return this form to:
WARNING: Section 1001 of Title 18 of the U.S. Code makes it a criminal offense to make willful, false statements of misrepresentation to any Department or Agency of the U.S. as to any matter within its jurisdiction.
4/14/15
