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Post tax premiums and MERP


Guest cjsmith
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Guest cjsmith

Hi,

I have a MERP that allows post tax premiums to be submitted for reimbursement.

I was looking for clarification on what is meant by "post tax"

Thank you!!

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Not deducted pre-tax under a section 125 cafeteria plan. Post tax is after tax calculations.

What is the benefit of doing so?

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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Guest cjsmith
Not deducted pre-tax under a section 125 cafeteria plan. Post tax is after tax calculations.

What is the benefit of doing so?

Meaning, I can only submit for reimbursement premiums, which have been taxed?

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Premiums that were pre-taxed are never reimburseable. That would be double dipping. See Rev Rul 2002-3.

The reimbursement of premiums paid with taxed money (post tax) is addressed in Rev Rul 61-146.

I am not sure that many MERPs are worded or set up for such premium reimbursement so check the plan document.

I usually see a separate special MERP set up specifically for this.

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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