Employer Reimburse Health Care Expenses

[Guest Texprobateguy]

Physician practices medicine through a professional association (a specialized type of corporation for professionals if that doesn't mean anything to you) he is the sole owner and only employee.

I want him to be able to reimburse himself for health care expenses that are uninsured without being treated as compensation to him. I know these are probably basic - stupid questions but (1) can I do this (2) what documents do I need (3) will anyone share them with me

I'm an attorney but please assume (correctly) that I know nothing about employee benefits law.

[Guest gdburns]

Is a P.A a pass-through entity like an S Corp or is just a dba?

How does he get his share of the profit. K-I ???

[Guest b2kates]

assuming his PC is a C corp, not an S, it needs to adopt a section 105(h) medical reimbursement plan.

Drop me a note off line to discuss further.

[Guest Texprobateguy]

assuming his PC is a C corp, not an S, it needs to adopt a section 105(h) medical reimbursement plan.

Drop me a note off line to discuss further.

I'm assuming that it doesn't work for an "S" corp. Im not an income tax expert, but it seems to me conceptually that doesn't make sense - becuase items flow through to shareholder and shareholder cannot deduct medical expenses except to the extent exceed 7.5% right?

So say he's taxed under subchapter "c". What do I need to set him up?

[Guest b2kates]

I'm assuming that it doesn't work for an "S" corp. Im not an income tax expert, but it seems to me conceptually that doesn't make sense - becuase items flow through to shareholder and shareholder cannot deduct medical expenses except to the extent exceed 7.5% right?

So say he's taxed under subchapter "c". What do I need to set him up?

As a C corp, medical benefits received are tax free if non discriminatory under section 105(h).

If an S corp benefits are taxable as if a partnership and therefore not tax free but subject to 7.5% threshold.

Plan is easy normally comes with corporate minute book . If you need exemplar, drop me a note with your email

[Guest Texprobateguy]

I'm assuming that it doesn't work for an "S" corp. Im not an income tax expert, but it seems to me conceptually that doesn't make sense - becuase items flow through to shareholder and shareholder cannot deduct medical expenses except to the extent exceed 7.5% right?

So say he's taxed under subchapter "c". What do I need to set him up?

As a C corp, medical benefits received are tax free if non discriminatory under section 105(h).

If an S corp benefits are taxable as if a partnership and therefore not tax free but subject to 7.5% threshold.

Plan is easy normally comes with corporate minute book . If you need exemplar, drop me a note with your email

Thank you very much - The fact that this doesn;t work for an "S" corp isn't in 105. Do you know of some authority for that. This person will want "S" status, and want to kow exactly what he can't do it that way. This is a neat forum, Thanks again for input.

[Guest gdburns]

Rather than rehash old discussions about IRC sections 125, 318 and 1372 etc I suggest that you do a search on this Board (not Google) for the term 1372. Use the link at the top right of the screen.

You will find a few lengthy and detailed discussions that should satisfy your client.

[Guest sdelison]

Be Careful with this... A P.C. can either be set up as a corporation that is more like a S corp or a C Corp. According to the EBIA manual an owner in a pass through corporation cannot have any pre tax deductions and must all be run through his personal taxes (Subject the the 7.5% AGI deducation)