Risk & Business Magazine CEO/CFO Business Today Magazine | Page 29

EXECUTIVE MEDICAL REIMBURSEMENT
I
n an earlier issue of CEO/CFO
Business Today, I wrote about “Golden
Handcuffs,” an executive benefit plan
that can be used to attract, reward, and
retain those key people that are critical to
your business success. That plan described
a supplemental retirement benefit—but
only payable if the executive stays until
fully vested—and the plan often includes
a key employee life insurance provision
to protect both the business and the
executive’s family.
This article describes a different kind
of “Golden Handcuff,” as it provides
a tax-smart way to add a Medical
Reimbursement Plan for a select group
of employees. A properly implemented
plan can carve out a select group of
employees—often it is limited to the
company executives and/or owners—and
can provide medical reimbursement that
is both deductible to the company and tax
A PROPERLY IMPLEMENTED PLAN CAN CARVE OUT A
SELECT GROUP OF EMPLOYEES—OFTEN IT IS LIMITED TO
THE COMPANY EXECUTIVES AND/OR OWNERS—AND
CAN PROVIDE MEDICAL REIMBURSEMENT THAT IS BOTH
DEDUCTIBLE TO THE COMPANY AND TAX FREE TO THE
EMPLOYEE.
free to the employee. These plans can be
built with a flexible benefit schedule, can
include spouse and dependent coverage,
and can cover both the deductible and
out-of-pocket costs under the base medical
plan as well as reimbursing for other
medical expenses that are not covered
under the base plan.
The plan, in order to qualify for favorable
tax treatment, must be an insured plan
(not a self-insured 105h program) and
normally includes a variable premium
funding arrangement. The plan is normally
used for a select group of key employees
and can include partners and owners of a
greater than two percent share of company
ownership, who are not eligible for some
other company benefits such as the
company FSA/Section 125 or HSA plans.
A properly designed and funded select
Medical Reimbursement Plan can truly be
a “smarter way” to provide an important
benefit for current executives and owners
as well as being a useful recruiting benefit
for new C-suite talent. +
Mark Snider is owner of Snider, Fuller and Stroh, a
benefits firm located in Athens, Ohio. Mark moved to
Athens to start his insurance career in 1971. He has been
active in his industry, serving as a past president of the
Ohio Association of Life Underwriters, a national board
member of the Association of Health Insurance Agents, a
life member of the Million Dollar Round Table and Top
BY: MARK SNIDER
OWNER
of the Table, and a board member of the Hocking Valley
SNIDER FULLER AND STROH
Bank.
He has been active in many civic activities and has been a past president or board member
of Athens Downtown Kiwanis, O’Bleness Memorial Hospital, United Appeal, Rural Action,
the 317 Board, and Athens Area Chamber of Commerce, twice being named as the Chamber
Person of the Year. In 2010, he was awarded the Ohio University Honorary Alumnus of the
Year Award. Mark is married to Rita and they have five daughters and six grandchildren.
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