Insured medical reimbursement plans.

[Guest Timothy A. McAfee]

Lincoln National Life is exiting from the "insured" medical reimbursement plan marketplace. Is anyone aware of other insurance companies that are currently in that marketplace?

[GBurns]

Guarantee Trust sells their Exec-U-Care in many states and a Wellpoint subsidiary whose name I cannot remember (it was something like EPIC Ins. Co) sells their Exec-U-Med on the West Coast.

Are you comfortable with this type of plan? Why?

[Guest Dick Boever]

Exec-u-care is being marketed by Jefferson Pilot, you can get info at exec-u-care.com. Boston Mutual also markets a similar product. CPIC Life has Exec-u-med. I had never heard of these plans until about two weeks ago.

Is anyone using these plans? What is the catch?

[Guest Timothy A. McAfee]

The issue with "insured" medical reimbursement plans, since they are otherwise discriminatory, is whether there is really a shifting of risk to the insurance company. We have used the Lincoln plan for the past 15 years. Early on their plan was audited in our District and passed muster. I have not heard of any other IRS action regarding theirs or similar plans. I have no idea why Lincoln is exiting the market, but suppose it is economic. It doesn't appear to lose money, but it doesn't appear to make a lot of money either.

[GBurns]

To make the assumption, or any assumption, in a matter like this is dangerous. Instead of assuming that Lincoln is exiting for economic reasons, you should ask them instead.

I was not aware that Lincoln was located in your District so why would they have been audited there? Also Lincoln is not the using taxpayer so why would an audit of Lincoln be relevant?

The fact that you have been using the plan for 15 years is not a relevant issue. Many other insurance products have been in use for long periods before being attacked by the IRS. COLI, Split dollar and Reverse Split Dollar come to mind very easily.

[Guest Timothy A. McAfee]

I should have been more specific. A Lincoln insured medical reimbursement plan used by a taxpayer in my District was audited and found to be in compliance with the risk shifting requirement for a policy of insurance. The local IRS office, to my knowledge, did not pursue further audits of the plan which was used extensively in my locale. The plan was originally marketed through a regional benefits consulting firm. I have no contacts at Lincoln, however, I have been told that they have been sold and that parts of their business are either being sold or they are exiting the market completely.