How to Set Up a Medical Reimbursement Plan
by adminThe plan works the same whether you are married or single with
children.
• Step 1: Hire your spouse (or a child) part-time. Keep in mind that this will only work if you are a sole proprietorship, partnership, LLC, or “C” corporation, not an “S” corporation.
• Step 2: Draw up formal paperwork for both a medical plan and a reimbursement plan. This can be done through a good attorney for about $500 or you can do it yourself by referring to the toll-free number and kit materials available in Appendix A of this book. Such medical reimbursement packages will include properly drawn up employment contracts, independent contractor contracts and a legal self-insured medical reimbursement plan. If you use such packages, you may still want to have your lawyer tailor it to your needs.
• Step 3: Make your spouse or child the primary insured on a written medical plan.
• Step 4: Have your spouse or child elect family coverage. This means that you, your spouse, and your kids will be covered.
Note: IRS Regulation 1.105-5 states that a medical reimbursement plan for a sole proprietorship, partnership, or LLC can have as few as one employee. Thus, if your only employee is your spouse, you can still qualify for a medical reimbursement plan.
Taken from : Money Mastery “10 Principles That Will Change
Your Financial Life Forever
