How to claim back health expenses
It's never been easier to get back some of the cash you've handed over to your doctor, yet many of us just don't bother. What are you waiting for, asks John Cradden
Depending on who you ask, the process of claiming back your health and medical expenses, whether it's from your private health insurer and/or the tax relief from the Revenue, is either as easy as 1-2-3 or a nightmare of byzantine complexity.
The truth is, of course, somewhere in between, but what is clear is that efforts to move these processes online have made things much simpler and more streamlined in the last three or four years.
Indeed, a quick poll via social media showed that many punters who claimed their 20pc tax relief on qualifying medical or health expenses online from the Revenue (either through PAYE Anytime or submitting an e12 form) found it very straightforward.
If you rack up €500 in medical expenses in a year, you can get back €100 in tax relief on expenses like GP costs, prescribed drugs and medicines, hearing aids, home nursing and maternity care, among others.
Those who used the paper form (MED1/2) had mixed fortunes, with one person describing the process as "a rigmarole", while another got an accountant colleague to fill in it. "It took him 30 seconds and he earned a bottle of wine," he said.
Whether you file by paper or online, you can claim back for up to the last four years and don't need to submit the original expenses when sending in the form - although you do need to keep them for at least six years in case the Revenue has a query or if you are selected at random for a routine audit.
Some of those who have private health insurance say the process is a little bit more complicated, even "arduous", but by most accounts not that much more so.
"In my view, the main obstacle to claiming back expenses is consumer inertia," said Dermot Goode, of Totalhealthcover.ie, a health insurance broker.
Many of those on "ordinary, standard" policies may have very little cover for routine (or 'day-to-day') medical expenses. "But anyone who has a good corporate plan or anyone who has added on day-to-day cover gets guaranteed refunds," he said. The problem for a lot of those customers is that they just don't bother claiming even though they have the cover. Claiming is really very straightforward."
Goode added: "A lot of people give their expenses to their accountant to claim back tax relief and never claim from the insurers."
But there is one quite common myth that should be dispelled: that you can't claim on your health insurance policy AND the tax relief from the Revenue.
Even if you have private health insurance cover, you can still claim back the tax relief, but only on the portion of those expenses not covered by your insurer.
For example, if your health insurance policy gives you €25 for each doctor's visit but the visit cost €50, you can claim tax relief on the €25 which wasn't covered by your insurer.
However, given the hefty premiums on health insurance, many strongly believe that you should still be able to claim the tax relief on all your medical expenses - including those covered by your policy.
According to Laura Haugh of popular parenting website Mummypages.ie, many of their members "feel this is discriminatory and that they should benefit from tax relief on these expenses in addition to any refunds given to them by their health insurance provider, since the two are very different entities".
But when it comes to tackling the two processes what a lot of people do, which is wrong, is to claim from the Revenue first, according to Goode.
Of course, if you have no intention of claiming from your insurer, that's a different story, but Revenue want to know what you have claimed in expenses off your policy for any relevant years before granting you your tax relief.
If you send all your receipts into your insurance company first, they will send you back a statement that shows you in detail your total claim, your total refund and therefore your total shortfall. This is all the evidence that the Revenue needs.
But it's advisable to keep copies or scans of all your expenses in any case as insurers generally won't return them.
Even if you're one of those folks who would rather stick pins in their eyes than fill out a form, there are folks who can do it for you.
Besides an accountant, who can claim your refund for you as part of filing a Form 11 tax return, there are agencies dedicated to claiming back tax refunds for a fee or a percentage of your eventual refund, such as Taxback.com or Red Oak Tax Refunds.
"If you haven't made a claim anytime in the last four years and during which you have accumulated a lot of expenses, it may be worthwhile asking one of these entities to do it for you because, in my view, it's a small fee for what could be a large refund," said Goode.
Furthermore, insurers are trying to make it easier and more convenient to claim, he said.
VHI and Laya both ask you to download a claim form, print it out, sign it and post it along with your original receipts. With Aviva, for hospital claims, you can download a form and post it along with your receipts, but for outpatient and day-to-day claims, you don't need to fill in a form - just send in the receipts.
With Glohealth, you can 'claim as you go' rather than wait until the end of the policy year for some expense claims, and without the need to fill in a form - just submit receipts as you incur them, send them with your policy number and they will do the rest.
Most insurers will also lodge payouts to a bank account rather than post a cheque.
The next big advances in health insurance claims convenience will be in smartphone apps, according to Goode.
For tax relief claims, you can already download a Revenue app (called PAYE Health Expenses Tracker) which allows you to record medical expenses as you go, and then to use the information to then submit a claim to Revenue.
It's well known that the 20pc tax relief on health insurance premiums is deducted at source by the insurers, but it's less well known that those who have their cover paid in full or in part by their employer (and for which they have to fork out benefit-in-kind) have to claim it back themselves.
Goode estimates that at least half of those who have employer-paid plans are not aware of this, and they could be losing out on thousands of euro in refunds as a result.
For more information on claiming tax relief on medical expenses, look up the IT6 leaflet from your local tax office or online at revenue.ie, or IT5 for claiming back relief on insurance premiums for those with employer-paid plans