Health Reimbursement Arrangements

[Guest Matt Lake]

Health Reimbursement Arrangements (HRAs)

Per IRS guidelines, an employer can reimburse an employee for health insurance premiums for themselves, thier spouse, and and any dependents.

Is there any guidance tht anyone knows of that states that the primary insured on the health insurance policy itself has to be the employee? Or could the primary insured be their spouse or even separate policies for each family member and still be reimburseable?

[Don Levit]

Rev. Rul. 82-196 states that employer contributions for an accident or health plan for the employee, spouse, and dependents before and after the employee's retirement and for a deceased employee's surviving spouse and dependents are excludable from the gross income of the employee and the survivors under Section 106. It also states that the taxation of health benefits paid to survivors of a deceased employee-participant is determined under Section 105. The revenue ruling considers an employee-participant to continue to be an "employee" for purposes of Section 105 and 106 even after termination of employment.

It seems that the key here is the employer-employee relationship, regardless of who is the primary insured, and the number of policies involved.

Don Levit,CLU,ChFC