Employees who’ve waived off Group Health Plan?

Does a section 105 plan, (IRS Code 105) have to cover employees who have waived off the Employer’s Group Health Plan?

An employee who elects to  participate in an optional HMO offered by the plan is considered benefited by the plan only if the employer’s contributions with respect to the employee are at least equal to what would have been made to the self-insured plan and the HMO is designated, with the self-insured plan, as a single plan.   Tax Facts # 304

(4) Nondiscriminatory benefits A self-insured medical reimbursement plan does not meet the requirements of subparagraph (B) of paragraph (2) unless all benefits provided for participants who are highly compensated individuals are provided for all other participants.  (IRS Code 105)

Each employee who is eligible to participate in the plan under Section 3 (an “eligible employee”)
3. ELIGIBILITY –  All full-time employees of the congregation shall be eligible to participate in this plan. A full-time employee is defined as any employee who customarily works forty hours or more per week and seven months or more per year.
shall become a participant in the plan (“a participant”) on the effective date of the plan if on the effective date he/she is at least ____________________ years old and has completed at least ______________ years of continuous employment with the congregation. Each other eligible employee shall become a participant on the first day of the month after he/she has both attained age ________________________ and completed at least ___________________ years of continuous employment with the congregation. A participant who is discharged from employment with the congregation for cause shall forfeit all rights to reimbursement under this plan  (Sample Document)
IRS Publication 15 B Employer Guide to Fringe Benefits
IRS Publication 15 B

Employee.  For this exclusion, [From Taxes under an Accident & Health Plan]  treat the following individuals as


A current common-law employee.  Publication 15 B Page 5 lower Right
Common Law Employee


Leave a Reply

Your email address will not be published.

wp-puzzle.com logo