Post-retirement health - tax issue under Code Sec. 106

[Guest Gibson]

Upon retirement, employer agreed to reimburse former employee for his monthly, private health insurance premiums. Employer sends former employee a check, employee pays the premium out of his personal account and then sends former employer a receipt. Is the premium reimbursement excludable from former employee's income under Code Section 106(a)? Based on my review of PLRs and Revenue Rulings (PLR 9347008 and Rev. Rul. 61-146), it appears that premium reimbursements are excludable from a retired employee's gross income under 106(a), provided that the employer requires an accounting, or other safeguards, to ensure that the funds are actually used to purchase coverage.

I believe that the situation described above could satisfy IRS requirements for the exclusion. Agreed? But, how does this arrangement constitute an "accident and health plan" under 106?

Thanks in advance.

[GBurns]

The definition of "accident and health plan" is found at Treas. Regs. 1.105-5. It is any arrangement a employer makes to provide or pay for the expenses of medical care for his employees and former employees.