Self-administered Health Reimbursement Plan
originally posted: 11/22/2006 reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If in doubt, please send a new question or ask for an update.
Q: I am an independent contractor but provide 60% of my time to one company. Do you think there would be any problem with me taking over the administration of the Health Reimbursement Arrangement?
A: Yes, if you are not an owner of the business and you are not signing the business's tax return or making personnel decisions, then this would be perfect. From a tax perspective, there is no requirement as to qualification, just independence. The separation from personnel control is more to control legal liability under HIPAA and not a tax issue. Use your judgment to be sure that the employees would not consider you to be to "close" to management to influence hiring and firing decisions. The business would not want to risk an accusation that management's personnel decisions were based on knowledge of an employee's health issues.
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