ERISA requirements for Medical Expense Reimbursement Plan

[Guest texestplan]

I'm an estate planner advising a client in connection with her closely held business. Acutally business now owned by her four sons. She is the sole employee and wants business to adopt medical expense reimbursement plan. It's tax motivated, the business deducts the expense, not included in employee income. For individuals medical expense deductions are subject to numerous limitations. And reimbursement plan will reimburse for expenses that typical health plans will not cover (OTC drugs etc.)

Anyway, even though there is only one employee is this an employee benefit plan covered by ERISA? if yes what requirements does ERISA impose? Need to give client an SPD? Filings with the DOL? I'm out of my element a little here and want to make sure I'm not missing something big.

One other thing, the employee isn't contributing to the plan. I put the COBRA provisions in about extended coverage etc. is it ok if employee doenst pay any premiums during the extended periods?

[Guest b2kates]

Is your client an officer or HCE of the company.

Look at 105(h) for the discrimination rules.

regarding SPD, technically under ERISA required...

[GBurns]

Your wording intrigues me. You posted "I put the COBRA provisions ". To me that implies that you are drafting the Plan Documents. Aren't you rendering legal advice and legal services?

If this is an S Corp, does she also get a K-1 as a result of 318 attribution rules?

[Guest texestplan]

I'm an attorney, so I can provide legal advice and services, although this really isn't my field and I'm doing it only as an accomodation to a long time client of the firm.

Corp is taxed under sub "c" rules.

Yes she is president of the company. Only full time employee. Are the discrimination rules involved?

Any problem doing the COBRA like I mentioned. i.e. after qualfiying event coverage is available for relavent peiord free of charge.

Thanks for the feedback.