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Luke- the success rate is extremely low. I think I've seen 2 approved after the PT. But those clients had attorneys working on it.

If one is in an integration optimizing mood, this might be fun to play with: https://benefitslink.com/cgi-bin/inte-greater/ I wrote it around 1992, using a nifty boxed Turbo Pascal programming kit I found in the clearance section at Office Depot. Businesses had stopped writing their own software programs for their Radio Shack computers and IBM PCs. I had fun with the programming and wrote the "Inte-Greater." Later on, I decided to see if I'd enjoy making something called a "web site" when the World Wide Web thingie got big in 1995 ?

If the initial beneficiary is NOT an EDB (eligible designated beneficiary, such as a spouse), then the 10 years is fixed. Doesn't matter if the beneficiary dies before the end of the 10 year period; if the bene does die, the balance still needs to be paid out within the 10 year original period.

Unless the employer allcoation is a fixed required contribution, limit his employer allocation, transfer the excess out of his account (I assume it was depsoited during the year otherwise you would have done this when calcualting his allocation) and reallocate it to the other participants.

Being picky - but not really as this might be significant - your "allocation method" is still groups or whatever the plan doc says it is. Your desired "allocation" just happens to be what an integrated formula would give you. That should then pass general testing on a contributions basis, imputing permitted disparity. But with, I believe, still some possibility of failure (channeling MP with the cryptic comment). You might know this but some innocent lurking may not.

Larry, I agree that that is a direct reading of the Code, but Treas. reg. 1.410(b)-2(f) seems intend to extend the relief to asset purchases.

The standard for a deemed hardship is "Expenses for (or necessary to obtain) medical care that would be deductible under section 213(d)". If an expense is "necessary to obtain" medical care then it follows that the financial need (and hence the withdrawal) precedes the actual provision of the medical care. So it seems to me that the reg at least contemplates, if not outright authorizes, withdrawals before the expense is actually incurred. I agree it does carry some risk to the plan and a plan administrator would be well within their rights to limit the availability of hardship distributions where the expense is expected but not actually incurred yet.

The participant doesn't necessarily have to furnish proof of the expense to the plan administrator at the time the hardship is requested - the plan can rely on a summary substantiation. There are plenty of other issues raised by allowing a hardship before the expense is actually incurred. For example: What if their insurance changes next year, and covers the drug? What if their doctor decides to change to a different drug? What if they get better? While there is not, strictly speaking, a requirement that the participant incur the expense before the hardship withdrawal is made, if the participant ends up not having the expense after the plan already made a distribution, then there is a qualification problem. Within the plan, if loans are available, then that might help get the participant at least part of the way. Outside of the plan, as someone who's been in a similar situation in the past, I'd recommend that they call the drug manufacturer. Often they have programs where they will offer the drug at a discounted price and/or on a payment plan to people whose insurance doesn't cover it. Some states also offer a charity care program which this person might be eligible for.