Have any of you heard of, or participated in, a health insurance program called a classis 105 program ?
As I understand it, it is a tax overlay system that is Circular 230, ERISA, and HIPPA compliant. It was implemented in 1954 under Section 105.
It creates a self funded Employee Welfare Benefit account that then reimburses the employee up to 75% of unreimbursed health expenses. The program lowers the gross income of the employee and reduces FICA payments by the company.
The program increases the pre tax premium for insurance, thus reducing the taxable income of the employee. then, a funding provision by a third party reimburses the employee 75% of the inflated premium . It is very confusing.
I had a very brief conversation with our broker. He's with a national firm and their compliance team will not let them market or place the business, so not able to get a lot of insight. The life insurance component is what typically makes it attractive to the agent (large commissions). Definitely keep your eyes wide open.
South Carolina Chapter
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