Spouse's medical premiums allowed as reimbursable expense?

[Guest cpmny]

Is a spouse's post-tax medical insurance premium an allowable reimbursable expense for a participant's cafeteria plan? If so, how would this amount be verified without using the spouse's wage statement which would indicate this premium is being paid after taxes are withheld?

[Lisa Hand]

Is this the spouse's group health insurance premium at another employer?

[Guest cpmny]

Yes, this is the spouse's portion of the health insurance premium offered through another employer. The couple are not employed by the same company.

[This message has been edited by cpmny (edited 01-12-99).]

[Lisa Hand]

In addition to the prohibition on reimbursing premiums thru an FSA, it is my understanding that a group health insurance premium must go through the sponsoring employer's cafeteria plan. Therefore, the spouse's group premium at her employer could got through that employer's Section 125 Plan, but since it is not an individual policy it is not eligible to go through a Section 125 Plan where she is not an employee. The discussion of reimbursing individual premiums through a non-FSA premium payment plan option is a different matter.

[Dawn Hafner]

I just ran into this question myself. At first I thought it was allowable as premiums are considered medical expenses under IRC Section 213, which is what most plans refer back to. But there is a proposed regulation that prohibits cafeteria plans from reimbursing premiums through FSAs.

See cafeteria Q&A board on this site. (from R.C. Morris, Inc.)

Question 100: Can insurance premiums be reimbursed through a Flexible Spending Account?

Answer: Absolutely not. This is not to say that the company cannot offer a "Premium Reimbursement Account" for the premium expenses associated with the company's sponsored medical plan. But a Medical FSA may not offer reimbursement for premium expenses.

See Proposed Regulations 1.125-2 Q&A 7(B)(4).