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Small Business Employee Benefits and HR Blog

2017 Standard Mileage Rates and How They Affect Health Reimbursement

Each year, the Internal Revenue Service (IRS) evaluates expenses eligible for 2017 Standard Mileage Rates and How They Affect Health Reimbursementreimbursement through tax-advantaged group plans, such as Small Business Health Reimbursement Arrangements (HRAs). In some cases, the reimbursement amount varies from year to year. Here are the 2017 standard mileage rates for business, medical, and moving expenses.

2017 Standard Mileage Rates

According to the IRS announcement on December 13, 2016:

  • 53.5 cents per mile for business miles driven (down from 54 cents in 2016)
  • 17 cents per mile driven for medical or moving purposes (down from 19 cents in 2016)
  • 14 cents per mile driven in service of charitable organizations (unchanged)

What This Means for Your Health Reimbursement

The IRS allows you to request reimbursement for health expenses from an HRA, flexible spending account (FSA), or health savings account (HSA) for medical (and related) expenses only. One of these allowed expenses is transportation relating directly to necessary medical treatment for you or your dependents.

This guideline includes costs such as ambulatory services; bus, taxi, train, or plane fares; and transportation costs of a traveling nurse or parent accompanying an ill person seeking medical treatment.

If you use your own car to transport yourself or a dependent for medical reasons, you may deduct your out-of-pocket expenses (such as gas and oil). However, if you’d rather not do the math, you can choose to request reimbursement for the 17 cents per mile driven instead. It is important to note that you cannot request reimbursement in both ways.

How Your Small Business HRA Can Cover Health Expenses

The new Small Business HRA, created by the Small Business Healthcare Relief Act (SBHRA) as part of the 21st Century Cures Act, allows for reimbursement of the same health expenses as FSAs and HSAs in addition to health premiums.

If you are covered by a group plan through your spouse’s employer, you would not be able to use your Small Business HRA to reimburse premiums. But the good news is that you would be able to request reimbursement for expenses like prescriptions, transportation (as outlined above), surgery, copays, medical bills, and much more. For a full list, see IRS Publication 502.

Conclusion

The IRS recently announced the standard mileage rates for 2017. This can affect your health reimbursement if you would like to claim your transportation costs for medically necessary treatments and procedures. Before you submit a claim to your benefits administration software, check IRS Publication 502 to see whether your expense is eligible.

The Comprehensive Guide to the Small Business HRA

What questions do you have about health expense reimbursement through the new Small Business HRA? Leave them in the comments below.

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