Section 105 plans

[Guest RAJ]

Are many companies using Section 105 plans and what issues need to be addressed upon implementing and administering such plans?

[GBurns]

The term Section 105 plan is very vague. What do you mean by a Section 105 plan?

[Guest RAJ]

There are a number of names, primarily a Defined Contribution, stand alone or free money plan. I operates like a self funded health insurance.

[GBurns]

There a quite a number of "plans" that fit the so-called Defined Contribution category.

The National Center for Policy Analysis, in trying to produce a paper on the subject, decided to try and group them into models. I think the ended up with 5 broad categories with many different variants in each model.

Managed Care magazine tried the same thing and ended applying the term Defined Care, because there were so many varieties of plans and concepts that fit "Defined Contribution".

Even within the Ehealth phenomenon there are variations. Definity - Vivius - Myhealthbank etc etc are all different.

Which specific one are you talking about or are you talking about a fixed amount benefits credit Section 125 Cafeteria Plan or the Health Incentive Plan?

[Guest RAJ]

I would be looking at the Health Incentive Plans.

[GBurns]

Now that is a whole different ball game. All accident and health plans, including STD, LTD, medical, dental, vision, cancer, FSAs etc etc are all 105 plans. The Health Incentive Plans are supposed to also be 105 plans. Note the use of the word "supposed".

There are 2 plans being sold under the same Health Incentive Plan name. Which one are you talking about?

The one from the Redwood Group (TRG) has been under investigation by the IRS and Treasury Dept and was included in the 2001 Priority Guidance Plan for the issuing of a ruling explaining why that "version" does not work. It has also been the subject of many articles from the EBIA, the ECFC, Ernst & Young, PwC and William M. Mercer warning that it does not work.

TRG, the Redwood Group, the TRG Marketing Plan and their activities involving their HI Plan is also the subject of over 30 current state Dept of Insurance investigations.

This issue has been addressed, recently, a number of times on this Board and related Boards. You might want to do a search to read the previous posts.

[Guest RAJ]

Thanks for the information. I will research.

[GBurns]

Have you found anything that might be of interest?