HRA Expenses and spouse premiums

[Guest lmccormick]

We currently have an HRA plan that allows for premium reimbursements of health insurance policies. Any reimbursements have always been only for individually purchased policies for the employee, spouse, dependents.

We have an employee who is divorcing and whose wife has cancelled the children's individual plans and signed up for the group plan at her company. I am assuming she is now paying her share of the premiums using pre-tax dollars.

The father (our employee) wants to submit for reimbursement for the children's premiums/and actually for the spouses as well until the divorce is final through our HRA plan. I don't believe we're allowed to reimburse him for premiums which have already been paid for using pre-tax dollars but can't seem to find where I read that before.

In the event his divorce dictates that he is responsible for paying the children's premium costs how will that work as far as filing a claim/reimbursement request through our HRA? Do we have to have him show proof he's reimbursing the wife for this cost?

I hate that employers are forced to managers of employees personal needs. But that's the mess the government has gotten us into!

[leevena]

I am a little confused by your question. 1. You say that your plan reimburses for individual policies, but does it also reimburse for other types of plans? What does your plan document say? 2. Why do you believe that the premiums paid (you assume the wife paid these) are pre-tax? So, if you plan only reimburses for individual policy premiums, you cannot reimburse for group. If it does reimburse for group plan premiums, you need to reimburse him.

As for proof of the premium responsibility, the answer should be yes. I am assuming that you ask others to show proof of expenses, correct?

By the way, blaming the govt for this "mess" is incorrect. You do not need to do any of this if you don't want to. Remember, it was the employer who opted for this plan.

[Guest lmccormick]

By the way, blaming the govt for this "mess" is incorrect. You do not need to do any of this if you don't want to. Remember, it was the employer who opted for this plan.

Naw, the government doesn't control what is taxable and what isn't. Of course the government got us into this mess!

[J Simmons]

There should not be tax-free reimbursement for premiums paid tax-free already. This would be similar to the HI Plan promoted about 6 or 7 years ago by the Redwood Group. That 'double dipping' was stopped by Rev Rul 2002-3 and Rev Rul 2002-80.

Even if the premiums were not already paid tax-free, it is not clear that they would qualify for tax-free reimbursement because the policy is not owned by the employer sponsoring the HRA or its employee.

As for proof before reimbursing the employee for paying premiums, take a look at Rev Rul 61-146, 1961-1 CB 25, and PLR 9631023.