Our business is mature and has employed family members. We’re expanding and hiring non-family employees. We’ve deducted the cost of our health insurance and doing the MERP on our own, with a one-page agreement we bought online. Why can’t we do the same? : FAQ/Blog/Solutions
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Our business is mature and has employed family members. We’re expanding and hiring non-family employees. We’ve deducted the cost of our health insurance and doing the MERP on our own, with a one-page agreement we bought online. Why can’t we do the same?

by Tom Luker on 05/01/15

The main question here is “why can’t we use a one-page form we downloaded from the Internet and administer our own MERP?”

You can, but it helps to use professional help, just as you use a tax professional to advise you on tax matters and keep certain records in order to keep the IRS happy. A good TPA will be sure your plan is current.

  • There have been many changes recently because of the PPACA. If you just have family members as eligible EEs, then a Sec. 105 MERP/HRA can suffice, but if you are adding non-family EEs you might want to add a Sec. 125 Cafeteria/Flexible Spending Account.
  • Can you have both? Yes, as long as all non-discrimination rules are followed as described in ERISA established in 1974, expanded in 1978 [Flex Plans] and major Sec. 105 changes in 1980.
  • A good TPA will work with your tax professional to be sure your plan or plans are in compliance with little or no increase in overhead.
  • An outside TPA will also help to maintain privacy when employees submit reimbursement requests, a very important part of HIPPA.
  • Finally, if you’ve been self-administering a “do-it-yourself” MERP/HRA in the past, without any problem, and now have decided to use a TPA, be sure to apprise the TPA how you have been doing it.

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