Section 125 question

[ShelliW]

What is the name of your state?What is the name of your state?Oregon

This is regarding individual medical insurance premiums and a section 125 flexible spending account. My husband's employer has a section 125 plan, but his medical insurance is entirely paid for by the employer so we don't need to use the section 125 account for that.

We have a separate insurance policy for myself and our son because it is cheaper than adding us to my husband's policy (and my part-time employer doesn't offer me insurance). Can we have the amount of my premiums taken from my husband's salary and put into his section 125 account, and submit for reimbursement from the administrating company? The plan administrator says yes, as is similarly done with "out of pocket" medical expenses for all family members. But I have heard that the IRS doesn't allow this. I tried reading the "code" but can't make sense of the verbiage and we don't want to set ourselves up for tax problems.

Thanks.

[nanomug]

Each plan administrator can have a slightly different take on what is deductible and what isn't but should be relatively the same. When we had private insurance, we were able to deduct it from the pre-tax plan. I recall that we had to provide documentation (check with your plan administrator as to what the documentation would be). The health plan offered through my husband's employer at that time was not good coverage and extremely expensive (triple what we paid on the private plan). The other thing to consider if your husband's plan is good is that the premiums come from pre-tax dollars anyway which in some cases is better than using the pre-tax reimbursement plans as you will have to pay the premium, submit the documentation and wait for a reimbursement. Some plans reimburse weekly others monthly.