Cafeteria Plan Premium Reimbursement

dchr9203

Posted under benefits, put am putting here as well due to more traffic. Anyone know where I can find information to substantiate/validate our carefeteria plan's requirement for billing statements or invoices for a premium reimbursement election?

Thanks

Wildsporty

I am not sure what you are asking. Are you billing and invoiceing employees or the vendors.

Can you explain your plan a little bit.

my email is [email]smcallister@aimintl.com[/email] if you wish to email me.

Or call at AIM (208) 463-2120.

I have set us both self funded Cafeteria Plans with all the forms and am presently working with a partially self funded plan. If I can figure out what you need, I may be able to help.

Shirley

pork1

DCHR9203: I responded on the benefits post and I have done additional search and re-education of the components of your question. Bottom-line is No Reimbursement of No Tax Safe dollars being re-imbursed to the contributor. It is clearily written that "No use, you loose" thus the need for fixed cost types of items allowed in your Caferteria plan. There are any number of items the premium cost of which can be included in your Cafeteria Plan. For most of us the floating cost items like child care, or vision, and dental premiums allows for an expenditure, leads to micro management of the funds to attempt to have the input be the legally same, as the out bound dollars. Otherwise there is no re-imbursement.

Now, if your question pertains to the distribution activity, your plan will specify what are the rules to get the Cafeteria Plan to payout a ligitment expenditure, how else would an accounting person know that the money dispersed was for a litigitment expense except by voucher/invoice/bill for payment/statement of an account? In business nothing gets paid out without some written document which atest to the accounting person's activity and Bond for the work performed.

Section 125 of the IRS code will give you the outline of the Cafeteria Plan. I went to one of our state University Web page and read their Section 125 Cafeteria Plan and in there it writes for the reading that Cafeteria Plan is to disperse the fund amounts in accordance with your instructions and in bold lettering "USE IT OR LOOSE IT" words to alert the employee to keep close watch on their fund activities up to $5000.00 to spend it or on September 30, the fund will zero the account and start you a new account for the new business year. October 1, is the first day of the governments new year.

Interesting and glad I refreshed my memory!

PORK

dchr9203

Thanks for the input, but let me clarify the specific plan. Under our "Cafeteria Plan", we allow employees to elect a "premium reimbursement" amount that permits them to run the premium through the plan, on a pre-tax basis; must be premiums paid for a qualified health plan(s); not the company's group benefits. For example, a retired military person pays $100 per month in premiums for Tricare benefits; the employee can elect under the Cafeteria Plan to have the premium deducted and "reimbursed" each pay period on a pre-tax basis. Its not a part of the health care flexibile spending account; its a separate plan. Some plans call it Premium Reimbursement; some call it Premium Only Plan. You see it more with defense contracting employers because so much of their workforce is retired military. Hope that helps shed light on it. Basically, I have one employee who wants to play but doesn't want to prove he's using the plan for a qualified health plan and I just want to be able to quote "the law"; seems like when you invoke "IRS Regulations require that....." you get faster results.

Thanks!

pork1

I agree that having the ability to quote the law is good words to have. Your Cafeteria plan should be written to point out the benefit services and programs that are supported by documentation, after all Section 125 of the IRS Code is pretty serious about how we companies go about protecting our employees monies from the IRS monies due it.

If his idea is not specificly designed to be covered under the Cafeteria Plan, then I would certainly not let him exercise some special arrangement but use the company to protect his compensation from TAXATION.

Good luck with keeping your troops in line on this one.

PORK