IRC 105: self-insured med reimb plan and IRS Rules

[Moe Howard]

Can anyone direct me to some good literature regarding IRS requirements of medical reimbursement plans, as they relate to the following issues ?

1. Can a C-corp establish a 105 Med Reimb plan if the C-corp has only ONE employee, who happens to be the 100% sole shareholder ?

2. Where can I find proof that a 105 Med Reimb plan cannot exist until there is first a written plan document, even if the only participant is the sole-employee shareholder ?

3. Is it impossible for a C-corp, that has only ONE employee who happens to be the sole-shareholder, to ever be able to pass the eligibility & non-discrimination requiremenrts of IRC 105 (due to the fact that he is the only employee) ?

4. Is there a specific list of things that MUST be addressed in a 105 Med Reim plan document. ?

Thanks

[J Simmons]

Can anyone direct me to some good literature regarding IRS requirements of medical reimbursement plans, as they relate to the following issues ?

1. Can a C-corp establish a 105 Med Reimb plan if the C-corp has only ONE employee, who happens to be the 100% sole shareholder ?

YES.

2. Where can I find proof that a 105 Med Reimb plan cannot exist until there is first a written plan document, even if the only participant is the sole-employee shareholder ?

Treas Reg 1.105-11(b)(1)(i).

3. Is it impossible for a C-corp, that has only ONE employee who happens to be the sole-shareholder, to ever be able to pass the eligibility & non-discrimination requiremenrts of IRC 105 (due to the fact that he is the only employee) ?

YES, there would be no non-highly compensated to discriminate it. This is not like the 25% key employee concentration test under IRC section 125.

4. Is there a specific list of things that MUST be addressed in a 105 Med Reim plan document. ?

1. Describe the benefit (e.g., reimburse up to $5,000 of qualifying medical expenses under IRC sec 213(d) per year).

2. Describe eligibility (i.e., you can impose up to 3 years of service for eligibility, age 25, seven to nine months per year, 25 to 35 hours per week) to keep out another employee if hired later.

3. You might add ERISA provisions (plan administrator, claims procedures, etc), again for the possibility that another employee might someday be hired.

[GBurns]

The only things else that I could add are:

I would go through all of 1.105 not just 1.105-11

http://benefitslink.com/boards/index.php?a...post&id=184

Do a Google search for samples of documents.