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Can Medicare premiums and copays be flexed?


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Never had this come up. Not in my materials. I searched the board and found a similar, but unanswered question from back in 2007.

Medicare premiums; pre tax like insurance premiums?

Medicare co-payments; can claim under a health FSA?

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Never had this come up. Not in my materials. I searched the board and found a similar, but unanswered question from back in 2007.

Medicare premiums; pre tax like insurance premiums?

Medicare co-payments; can claim under a health FSA?

I know you can't contribute to an HSA after the month in which you turn 65, but I would expect that any monies on deposit could be used to pay Medicare co-payments.

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Guest Benefits Broker CO

If you're talking about FSAs (as opposed to HSAs), I think both Medicare premiums and copays would be allowed as long as they fall within the IRS definition of allowable reimburseable expeneses.

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If you're talking about FSAs (as opposed to HSAs), I think both Medicare premiums and copays would be allowed as long as they fall within the IRS definition of allowable reimburseable expeneses.

But you can't use an FSA to pay insurance premiums. So in that, case, could a benefit be offered to pay medicare premiums pretax? I'm guessing the copays would be acceptable to flex under the FSA like other copays, but just guessing because medicare is involved.

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could a benefit be offered to pay medicare premiums pretax?

http://benefitslink.com/boards/index.php?showtopic=43465

Depends on size of the employer. Medicare has rules to prevent companies w/ 20 or more employees from enticing employees to switch to Medicare. It can get to be a mess fast.

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  • 2 weeks later...

Medicare Part B premiums are not eligible under Sec. 125. Medicare is a government sponsored medical plan not described in the tax code, or in either Sections 105 or 106 of the IRC.

Sec. 125 prohibits the reimbursement of any premiums from a Medical FSA.

Medicare premiums are under certain circumstances eligible for a medical expense tax deduction when filing individual income tax returns.

Medicare co-payments and non-covered medically necessary expenses can be elected and reimbursed from a Medical FSA.

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Medicare Part B premiums are not eligible under Sec. 125. Medicare is a government sponsored medical plan not described in the tax code, or in either Sections 105 or 106 of the IRC.

Sec. 125 prohibits the reimbursement of any premiums from a Medical FSA.

Medicare premiums are under certain circumstances eligible for a medical expense tax deduction when filing individual income tax returns.

Medicare co-payments and non-covered medically necessary expenses can be elected and reimbursed from a Medical FSA.

I have seen companies with a separate Premium Reimbursement account under a cafeteria plan allow Part B premiums to be reimbursed. As descibed elsewhere Medicare is the primary insurance for small companies (< 20 employees), so why could it not be reimbursed like regular individual helath premiums?

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amcorson, IRS has not issued a final ruling on the type of reimbursement accounts that allow employees covered under a individual health policy to be reimbursed the premium by their employer via a reimbursement account. IRS has failed to issue a final ruling on the matter for a decade, maybe longer.

The other issue involves Medicare that is typically secondary payer, if or when there is other health coverage. Most Medicare beneficiaries are retired or disabled, therefore not working/employed. If they are employed, continue to receive Medicare and group benefits, or are retired/disabled, receiving Medicare B and covered under a working spouse's employer plan, well it's a fairly specialized niche market, with limited implications.

A Medicare B Premium payroll tax exclusion would be counter to Medicare funding objectives under the FICA Medicare payroll tax. Medicare secondary payer status is mandated to contain Medicare cost, but for exceptions a Small ER plan meeting requirements referred to in the CMS link below, providing small group plans a degree of relief.

Whether Medicare premiums are eligible to be reimbursed via a plan IRS has refused to rule on in a decade, considering Medicare funding & cost containment mandates, possible negative impact of a payroll tax exclusion , I don't believe so.

What I know about Medicare and ER issues I've just read under COB here: http://www.cms.gov/EmployerServices/05_sma...n.asp#TopOfPage

The site provides info for ERs w/20 or fewer EEs, including Medicare age eligible EEs/beneficiaries. CMS? may determine that Medicare claims qualify as primary payer, versus the small group plan as primary, provided the ER registers and qualifies for primary payer exemption? The site does not refer or advise the small ER group plan of other Medicare relief available, such as a Medicare premium payroll tax exclusion, based on my minimal reading/experience. It is beyond the scope of the topic being discussed.

Edits in bold.

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  • 2 months later...
Guest jsongray
amcorson, IRS has not issued a final ruling on the type of reimbursement accounts that allow employees covered under a individual health policy to be reimbursed the premium by their employer via a reimbursement account. IRS has failed to issue a final ruling on the matter for a decade, maybe longer.

The other issue involves Medicare that is typically secondary payer, if or when there is other health coverage. Most Medicare beneficiaries are retired or disabled, therefore not working/employed. If they are employed, continue to receive Medicare and group benefits, or are retired/disabled, receiving Medicare B and covered under a working spouse's employer plan, well it's a fairly specialized niche market, with limited implications.

A Medicare B Premium payroll tax exclusion would be counter to Medicare funding objectives under the FICA Medicare payroll tax. Medicare secondary payer status is mandated to contain Medicare cost, but for exceptions a Small ER plan meeting requirements referred to in the CMS link below, providing small group plans a degree of relief.

Whether Medicare premiums are eligible to be reimbursed via a plan IRS has refused to rule on in a decade, considering Medicare funding & cost containment mandates, possible negative impact of a payroll tax exclusion , I don't believe so.

What I know about Medicare and ER issues I've just read under COB here: http://www.cms.gov/EmployerServices/05_sma...n.asp#TopOfPage

The site provides info for ERs w/20 or fewer EEs, including Medicare age eligible EEs/beneficiaries. CMS? may determine that Medicare claims qualify as primary payer, versus the small group plan as primary, provided the ER registers and qualifies for primary payer exemption? The site does not refer or advise the small ER group plan of other Medicare relief available, such as a Medicare premium payroll tax exclusion, based on my minimal reading/experience. It is beyond the scope of the topic being discussed.

Edits in bold.

Thanks for this information LRDG..

But you can't use an FSA to pay insurance premiums. So in that, case, could a benefit be offered to pay medicare premiums pretax? I'm guessing the copays would be acceptable to flex under the FSA like other copays, but just guessing because medicare is involved.

I kinda believe this.. I don't think that medicare has much to do with the copays being acceptable to flex under FSA..

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