Section 105 Benefits Plan

Discussion in 'Employee Benefits Forum' started by smokin goose, Apr 28, 2013.

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  1. smokin goose
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    smokin goose Well-Known Member

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    Has anyone ever heard of or enrolled the "section 105 defined benefits plan"?
     
  2. ABC
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    ABC Well-Known Member

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    Yes, and..............................................
     
  3. leevena
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    leevena Well-Known Member

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    Yes, they are as old as the hills. Why?
     
  4. smokin goose
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    smokin goose Well-Known Member

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    I'm talking about the 105 plan that The Total Financial Group came up with where the employee contributes to a reimbursement account and then are given a weekly loan which is secured with a credit life insurance policy. Most employees end up bringing home more money and employers save a bundle on FICA taxes.
     
  5. Stephen
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    Stephen Well-Known Member

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    That sounds like something that we have under section 125, I am just a policyholder thought, not an expert.
     
  6. VolAgent
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    VolAgent Well-Known Member

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    I thought a 105 dealt with health care costs? Is the employee just pocketing the money?

    Also, what happens to all that interest?
     
  7. leevena
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    leevena Well-Known Member

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    You need to be more specific about the "product" that you are discussing. I went to their website and could not find any information about it.
     
  8. smokin goose
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    smokin goose Well-Known Member

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    It's pretty complex. It took me awhile to wrap my head around it. I haven't sold it. Just wondering if anybody here had. I don't even know if I could explain it correctly.
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    If you've sold/enrolled it, you would know.
     
    Last edited: Apr 29, 2013
  9. leevena
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    leevena Well-Known Member

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    Your comment above (If you've sold/enrolled it, you would know) is not true. A Section 105 plan can be structured in a variety of ways. Generally speaking, it refers to Section 105 of the IRS code and allows an employer to reimburse employees for qualified medical expenses. Usually designed within a self-funded health plan for the employer group. It can also be used for HRA's. The origins of these plans goes back 50 or so years as a vehicle for one man group.

    The use of a loan feature and the credit life insurance is new to me and makes me believe this is being used for something other than medical self-funding.

    Also, Section 105
     
  10. smokin goose
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    smokin goose Well-Known Member

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    Yes I realize the codes that make a 105 possible have been around for decades. If you have enrolled this particular plan you would know. My question was looking for someone who has implemented this specific plan, hence you have nothing further to contribute.
     
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