Question regarding Treas. Reg. 1.105-11 Medical Reimbursement Plans

[Guest carsca]

FACTS: Employees of Company are enrolled in an HMO. Company pays 80% of premiums to HMO; other 20% must be paid by the employees. Until now, the employees were paying the 20% on an after-tax basis (the Company has not established a 125 plan).

The Company will now establish a Treas. Reg. 1.105-11 Medical Reimbursement Plan to provide pre-tax reimbursements to employees for co-pays, deductibles, etc.

Question: Can the Company provide for reimbursements under the Plan for the 20% HMO premium?

I would think yes, since Section 105 refers to 213, and 213 includes premiums as "medical expenses."

Can anyone else confirm my analysis?

[GBurns]

Yes, a 105 plan could be set up to reimburse the employees for premiums paid with AFTER TAX money. See Rev Ruling 2003-3 and Rev Ruling 61-146 for the conditions of such reimbursement.

[Guest carsca]

Thanks for your very helpful response!

A follow-up question: could the plan in this case provide for reimbursements to an employee of post-tax premiums paid by his spouse to her company's health insurance plan?

I would think that this would be permissable under 105. Agree?