Offering for help? employees with their medical expenses out of pocket, as prescriptions, visiting the doctor co-pays and deductible expenses, is common for small business - especially if you're not offer traditional health insurance coverage
in the past, the go-to way for small businesses to reimburse employees tax free was with a plan Article 105 as an HRA, HRP or MERP. With new Obamacare rules, however, a common question we get from small business owners is, "Can we still use a plane Section 105 to assist employees in medical costs out-of-pocket ? " 
In this article, we will answer frequently asked questions on how to use Section 105 plans and other plans refund tax-free, to help employees outside -pocket medical expenses
note -. This question was raised during our recent webina r Can tax free redemption premium work for you? If you want to download the webinar on demand and slides Click here .
What Section 105 plans?
A Section 105 plan permits the payment tax-free medical and insurance costs, as allowed by Article 105 of the Internal Revenue Code (IRC) . Common types of section 105 plans are Medical Plans repayment as a reimbursement of health Arrangements (HRA) or health reimbursement plans (HRPS). Expenditure
Can Section 105 Plans Pay Medical Out-of-Pocket?
The short answer is that it depends on the type of section 105 medical reimbursement plan you use
Currently, employers can use these types of medical Plans section 105 Repayment of medical costs reimbursed out of pocket employee :.
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Integrated CRH may pay medical expenses out of pocket, but the HRA must be linked to a health insurance scheme collective.
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retired CRH may pay insurance premiums personal health and medical expenses out of pocket for retired employees.
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Someone Stand-alone HRAs may pay insurance premiums personal health and medical expenses out of pocket.
at present, employers can generally use these types Section 105 plans reimburse spending off-pocket medical
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Stand-alone CRH with more than two participants. This type of HRA is generally not consistent with reforms Affordable Care Act market.
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health care reimbursement plans (HRPS) may reimburse individual health insurance premiums and preventive care only, but no other medical expenses out of pocket.
What About Other refund or tax-free savings accounts?
In addition to section 105 plans, there are other vehicles refund that can be used for medical expenses out of pocket. The two main types are:
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health savings accounts (HSA)
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flexible spending Accounts (FSA)
for a comparison of different types of medical reimbursement plans, see this overview .
Conclusion
With affordable new rules of Care Act, there are only limited situations where Article 105 medical repayment plans can be used to pay employees' medical expenses out of pocket. However, other repayment plans such as HSA and FSA plans are available to give your business and the tax on employee savings on health care.
What questions do you have about the use of section 105 plans to pay out of pocket medical expenses? Leave a comment. We will help you answer them.
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