health benefits - s corp

[anied52]

I am the sole stockholder and employee of an s-corp. Because of medical problems within my family, I can't obtain health insurance at an affordable rate. I want to create a "qualified" medical-reimbursement plan. Is there any way of doing so without incurring the employment taxes on the reimbursement amount?

[OldJack]

Yes a qualified medical reimbursement "plan" can be established and is something offered by some insurance agents, benefit agents, or lawyers. There are several different type boiler plate plans with different requirements. The key thing here is that it has to be a "written plan" that does not discriminate and meets certain code requirements. I don't write health plans so I don't keep up on those requirements. Maybe someone else on here have some sample plans or a link to a website that has what you need.

[anied52]

Thanks. I did a search on google and found the following site:

http://www.tradersaccounting.com/mrp.asp

[retflaj]

When my attorney developed the by-laws for my s-corp, he stipulated that the corporation would reimburse all employees' medical expenses up to a specified amount. The reimbursement is a business expense and thus reduces the taxable pass-through to the employees. The only restriction that I am aware of is that the benefit must be applied to all employees.

Yes, this is not insurance per se, but it offers some relief when you do not have medical insurance.

Comments?

[OldJack]

How about sharing the document with all of us.

[Evan]

That doesn't sound unreasonable, and the bylaws are suppose to apply to everyone. What's good for the goose is good for the gander.

[retflaj]

Here is the section of my bylaws that addresses medical reimbursement. Just about all of my bylaws are boilerplate from an incorporation package that my attorney used. You should also takes a look at

http://www.smbiz.com/sbfrm002.html
http://www.totse.com/en/law/legal_forms/form516.html

____________________

MEDICAL CARE REIMBURSEMENT PLAN

OF

your corporation name here

All eligible employees, as defined herein, shall be reimbursed for medical care expenses, as defined by the Internal Revenue Code section 213(e), as amended, by themselves and their dependents, as also defined by the IRC section 152, as amended, as set forth below:

The limit for any one eligible employee shall be $____________ per year. Payments under this plan shall exclude any and all expenses covered by insurance policies. To the extent of coverage provided by any insurance policy or policies, the corporation shall be relieved from liability.

Premium notices for health or accident insurance and medical bills must be presented to the corporation on a quaterly basis. Failure to comply with submission of proof may terminate the right of reimbursement of that individual employee. The president of the corporation shall set up the rules and regulations of administration and interpretation of this plan.

This plan may be terminated at any time and for any reason by the board of directors of the corporation. In the event the plan is canceled, eligible expenses incurred prior to termination of the plan will remain covered.

____________________________
Chairman


____________________________
Secretary


Ratification Date:____________ day of _________________

____________________

I hope this helps you.

[OldJack]

Thanks for sharing Retflaj. This is pretty much the same as I have seen many times.

[anied52]

Thanks for the help.

[DaveHanson]

Many thanks for sharing this.

I wonder if anyone has a document suitably updated for use with HSAs, or whether one would need any modifcations for use with same?