Benefits Review – Optional Standard Mileage Rate for Medical Purposes
Compliance Alert Regarding 2008 Rate Increase for Mileage Reimbursement
The IRS announced a new optional standard mileage rate for medical purposes. Effective July 1, 2008 the rate will increase from $.19 per mile to $.27 per mile. The new rate may be used to calculate the amount reimbursable under a medical reimbursement account when a car is used primarily for or is essential to obtaining medical care.
Please note, in order to take advantage of this increase, you will need to track and pay claims incurred prior to June 30, 2008 at the $.19 per mile rate. Only those claims incurred after July 1, 2008 will be eligible for the increased rate of $.27 per mile.
Be sure to check with your reimbursement account service provider to ensure their system can accommodate this change before you decide to incorporate it into your plan. If your reimbursement administration is done by BCL Systems, our reimbursement system has been updated with this information and will be automatically implemented
As a side note, the IRS announcement also increased the amount eligible for reimbursement for deductible transportation moving expenses to 27 cents per mile and deductible business transportation expenses to 58.5 cents per mile for employees. These rates are also effective July 1, 2008.
The official IRS announcement may be viewed online