Section 105 plans are a tool used by employers to reimburse employees for medical expenses and health insurance. There are a few different ways Section 105 plans are used . Thus, Article 105 which plan is the best solution for a small business? Let's break it down.
What is a section 105 plan?
Simply stated, a Section 105 Plan allows tax-free reimbursement of medical expenses and insurance, as permitted by section 105 of the Internal Revenue Code (IRC ).
Deciphering Section 105 Plans
There two main ways Section 105 plans are used.
The first common type of Section 105 plan is a self-funded health plan (or self-insured) , where the employer's self-fund (or self-insures) the health benefits rather than paying premiums to an insurance company. This is common among large companies.
The second way a Section 105 Plan is used as a Shot reimbursement of medical expenses , such as health arrangements reimbursement (HRA) or health reimbursement plans (HRPS). A Section 105 medical reimbursement plan can be used either along the side of a group health insurance plan (to reimburse the deductible amounts not covered by insurance), or used as an advantage independent health (to pay the health insurance premiums).
As we wrote about previously , Section 105 Medical Reimbursement plans are different from other health benefit plans because they reimburse eligible expenditures, rather than providing a specific health insurance benefits. Think of them as a business expense account for health insurance premiums and / or medical expenses.
The Best Fit for Small Business
now that you understand that section 105 plans are and common means they are used, what is the best solution for a small business
the answer is a section 105 Plan reimbursement of medical expenses - used as a standalone benefit to reimburse individual health insurance
the reason is that the group health insurance is expensive -. very expensive - for small businesses. It is also restrictive and limited.
Moreover, individual health insurance is more affordable and flexible.
A Section plane 105 reimbursement of medical expenses (such as healthcare repayment plan ) allows small businesses the opportunity to reimburse employees for individual health insurance.
the result? Small businesses have a health insurance budget-friendly solution, and employees have a greater choice of coverage.
Conclusion
Section 105 medical reimbursement plans allow employers to pay individual health insurance. It is this type of arrangement is the best solution for small businesses looking to offer affordable health insurance solution.
Questions section 105 plans? Leave a comment below or download this free guide on Section 105 plans.
0 Komentar