Self-insured medical reimbursement plan

[Guest Liz Schulte]

Does anyone know the requirements to set up a self-insured medical reimbursement plan, and does anything need to be submitted to the IRS? I have heard that there is a one page format that the officer signs, but have been unable to locate any additional information on this topic. I realize this type of plan is not a cafeteria plan, but a cafeteria plan seems to be the closest plan I can come up with.

[KIP KRAUS]

Liz:

Need more information. Are you talking about a full blown self-insured medical plan , or are you talking about only reimbursing employees for medical expenses through a section 125 reimbursement account?

Either way, you should set the plan up with a written ERISA plan document. If the plan is large enough, you will have to file a 5500 at plan year end. I know of no filing requirements to set a plan up since the elimination of the EBS-1 filings.

[Guest JPCMPLS]

Liz: As an expansion of Kip's answer I would clarify what is meant by an "ERISA Plan Document". This means that there must be a document that is in writing, approved by the proper body of the employer/sponsor and it must include certain basic elements: description of eligible employees, covered benefits, benefit limitations, claims and appeals procedures and designation of one or more named fiduciaries. If the plan is covered by ERISA, participants should also receive a summary plan description with the items listed in the labor regulations for spds. The plan and the spd can be the same document in the case of a medical reimbursement plan.

A cafeteria plan medical reimbursement account plan document can be modified to work. The reference to a "one page form" derives from an old practice of establishing these plans with a corporate resolution.

[Guest Martena Fallon]

With the self-insurance plan our organization (non-profit) has, we receive an annual rebate for the difference between the cost of the premiums and the cost of claims filed. This self-insurance plan is an ERISA plan and as such it is our understanding that the employee dollar is considered the "first dollar" in and that all contributions are considered "Plan Assets." As such, we have deposited the rebate funds from the self-insurance plan into an account to fund certain benefit programs for both employees and clients (understanding that the rebate belongs to the organization). We are now questioning whether this is the proper handling of these funds. Does anyone have any experience with such things, and if so I would appreciate your input -- if you have any documented references I would appreciate some help. Thank you.

TF

[Guest Debbie Holsapple]

I have a question regarding self-insured medical reimbursement accounts. Our very small local government began one three years ago with the spd and information provided by a third party administrator. There are only two employees and this Sec 105 Medical reimbursement account seemed to be the best way to handle our needs. The local govenment provides a X$ of dollars per month and allows us to make tax deferred contributions also. We are on an annual contract basis and this information is included in that paperwork. Are we in violation of Section 105 because of the employee deductions? Do we need to change to a Section 125 and file form 5500. We would really like to avoid additional changes but we want to be perfectly legal

[Joe Priselac]

Yes. It sounds like you have a Section 125 plan because of the employee contributions which I asume are on a pre-tax basis. Your municipality could have a 105(h) plan without having to comply with any ERISA requirements. Since a Section 125 plan is considered a statuatory fringe benefit plan you are not exempt from filing a 5500 form. I would for simplicity operate one plan,a Section 125 plan that would allow for both employer and employee contributions.