Jump to content

Medical Hardship


Recommended Posts

Quick question on hardships for medical expenses.

Would a participant be able to claim a hardship to pay for medical insurance? My first though is/was no, but as I look at the text I am unsure as the IRC seems to suggest that they can.

The SPD says: 

The Plan does allow for hardship distributions for the following qualifying expenses:

 Expenses for medical care (described in Section 213(d) of the Internal Revenue Code) for you, your spouse or your dependents....

When I look at IRC §213(d), 213(d)(1)(D) says for insurance covering medical care referred to in subparagraphs (A) and (B) or for any qualified long-term care insurance contract.

exact copy and paste of §213(d)(1)(D) from Cornell Law below:

(D) for insurance (including amounts paid as premiums under part B of title XVIII of the Social Security Act, relating to supplementary medical insurance for the aged) covering medical care referred to in subparagraphs (A) and (B) or for any qualified long-term care insurance contract (as defined in section 7702B(b)).
In the case of a qualified long-term care insurance contract (as defined in section 7702B(b)), only eligible long-term care premiums (as defined in paragraph (10)) shall be taken into account under subparagraph (D).
 
So, this seems to suggest that a participant can request a hardship for insurance premiums. Is there anything that I am missing that would prohibit this type of expense from being a qualified hardship?
 
Thanks in advance!
Link to comment
Share on other sites

I believe insurance premiums for medical care are eligible for hardship distribution only if the premiums are not paid on a pre-tax basis.

Obviously other requirements may also apply if the plan doesn't use the safe harbor hardship distribution rules.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...