Can I Get Reimbursed for CB Banking?

• FREE or discounted banking programs
• Income tax deduction
• Flexible Spending Account (FSA) reimbursement
• Medical insurance reimbursement

1. Sibling that currently needs a transplant
2. Sibling that may need a future transplant
3. Other family member that may need a future transplant
   

Please see the page "Case of Medical Need" under the Medical tab.

If you itemize expenses on your US federal income tax return (IRS form 1040), then you can claim an itemized deduction for medical expenses which exceed 7.5% of your Adjusted Gross income (AGI). IRS Publication 502, "Medical and Dental Expenses" provides an alphabetic list of allowed deductions.

Cord blood banking is not explicitly named by the IRS as either an included or excluded expense! Moreover, while the IRS allows deductions for health insrance premiums, they do not allow deductions for life insurance premiums. Thus, whether or not it is legal to deduct the expense of cord blood banking hinges on whether it is interpreted as health insurance or life insurance. There is probably going to be a landmark ruling on this someday, but as of April 2005 it has not happened.

Some US employers offer an employee benefit plan called a Flexible Spending Account (FSA) for health care expenses. In this benefit plan, employees must decide at the beginning of the fiscal year how much money they will have with-held from pay checks and deposited into the FSA account. The with-held funds are released as tax-free reimbursement for "qualified" medical expenses.

If your FSA plan will reimburse you for cord blood banking, you will avoid income taxes on the money spent for the procedure. With the cost of private banking running over a thousand dollars, the savings is becoming significant. However, in order to take advantage of this program: you must work for an employer that has an FSA plan, and you must budget for banking at the beginning of the plan's fiscal year. Finally, please confirm that the benefits consultant which manages your plan will allow reimbursement for cord blood banking. Some parents have been denied reimbursement by their FSA manager, which is separate from your health insurance provider.

It is notable that the FSA guidelines from Aetna, one of the largest providers of health insurance in the USA, list "Umbilical Cord Blood" (alphabetic under U) as eligible for reimbursement if there is a case of medical need: "Expense is reimbursable if used in treatment of a medical condition. The amount not covered under regular medical coverage would be a reimbursable expense. The cost to collect, freeze and store umbilical cord blood would be eligible as long as a medical condition is present."

As of April 2005, I do not know of any medical insurance plans which routinely reimburse private cord blood banking. If there is a case of medical need in the family, some plans will reimburse the cost of banking. Obtaining this reimburement usually requires a special appeal, with the cooperation of your physician, and is handled on a case by case basis.