Before Internal
Revenue Code Section 105(h) was passed, a corporation could directly reimburse
executives for out-of-pocket medical, dental and vision expenses on a
discriminatory basis. It could deduct the self-funded expenses, and the
employee could receive the money tax-free.
Since IRC Section
105(h) passed, corporations may no longer provide this benefit on a
discriminatory basis unless it is part of an insured program.
Therefore, we make
available Medical Expenses - Insured Reimbursement Plans that legally
allow for employers and key personnel to pay themselves (on a discriminatory
basis) for health care expenses they currently or otherwise are, without such
a plan, paying with out-of-pocket hard earned after-tax income. We recommend
only State by State, Department of Insurance filed and approved Plans, that
are A.M. Best top rated (A “Excellent”) or better Insurance Companies.
Such Medical
Expenses - Insured Reimbursement Plans are really designed to address the
medical expenses reimbursement needs of owner/key executives and these Plans
are issued to, or via, their respective business. These Plans work for all
types of businesses.
Generally, insured group
plans that reimburse health care expenses are tax-deductible for an employer
as an ordinary-and-reasonable cost of doing business. The benefits of a
group medical plan are tax-free to the covered person. This combination means
no taxation for reimbursable health care expenses, as permitted by Section 213
of the Internal Revenue Code and by the insurance policy provisions,
limitations and exclusions. The permitted expenses are much, much more
than just deductibles and coinsurance, and include medical, dental, vision,
prescriptions, over-the-counter drugs, wellness, prevention, fertility,
sterilization and non-traditional treatment modalities, among many others.
What’s more, the level of treatment is not an issue. For example, if one
is nearsighted, you can use the plan to pay for Lasik eye surgery, instead of
eyeglasses.
Small Business Owner to Any Size Employer - A Plan Example:
As an individual with
taxable income, you currently pay out-of-pocket medical expenses with
after-tax income. As a business owner, you can put part of what you are
paying in expenses toward the tax-deductible premium of a Medical Expenses
- Insured Reimbursement Plan. When you do, you save the amount you
would have paid in taxes. The benefits you receive under the plan are
tax-free. If you have no out-of-pocket health care costs at all during a
plan year, your expense is a tax-deductible base premium of typically
somewhere around $250 for an individual or a family. You pay no
additional premium until you claim your expenses for reimbursement. The
additional premium is 10% more than covered expenses. All premium goes
to pay the cost of acquisition, insurance, sales and administration, as well
as other plan benefits, and either (in one such Plan) a $100,000 Accidental
Death Benefit or a $5,000 lump-sum Critical Illness (cash) benefit.
Compare the minimal
premium rate to your income tax rate, and you will see the difference.
The savings are significant, and can be leveraged into helping the key
executive/owner/employer with the costs of acquiring additional benefit
programs. What do the savings mean to you personally?
Many use the savings of
such Medical Expenses - Insured Reimbursement Plans to fund IRAs, ROTH
IRAs and more. Many accountants and attorneys themselves have such insured
plans, as do a wide variety of all types of business entities.
Please let us know how we
can help you too obtain such a valuable Plan: 800.482.5347
