reimbursement of days in hospital

[Linda Mathey]

Hope this is a easy question...I am having trouble deciding how to handle. Client is on Medicare and has a Medigap policy. In addition they took out an AFLAC policy that pays them directly for hospital stays they just submit bills and are reimbursed so much a day.

This year husband had a long hospitalization and they received $4,000 from AFLAC. Since these premiums are not deductible would I have reflect any reimbursements on Sch A?

Thanks for any assistance.

[RoyDaleOne]

Why would the premiums be non-deductible?

[TaxmannEA]

Because premiums for insurance that pays so much per day as opposed for actual medical expenses are not deductable as medical insurance premiums on Sch. A.

[Linda Mathey]

Because premiums for insurance that pays so much per day as opposed for actual medical expenses are not deductable as medical insurance premiums on Sch. A.

So would the money received from this type of policy be required to be reported as reimbursements on Sch A or is it similar to disability insurance in that if you pay the premium yourself the benefit is not taxable?

[RoyDaleOne]

It is irrelevant whether an insurance contracts benefits are payable in cash or services for purposes, for deductible purposes. However, if the cash payments are equivalent to disability payments then the payments are not deductible.

[RoyDaleOne]

To answer the original question is that you are suppose to reduce any medical expenses you have by the cash received.