Management Carve Out’s (MCO) Plans,
Management Carve Out’s (MCO) Plans, Executive Medical – is where managers, owners and key employees can get better coverage than other workers – similarly situated individuals – employees.
In the past there must have been bona fide employment-based classifications.
It’s a very complex issue as Health Care Reform §2716 Salary Discrimination appears to totally prohibit MCO’s. This includes a single employer or affiliated companies (common ownership).
However, Notice 2011-1 states that §2716 will not be enforced until final rules are issued.
Health Insurance and most employee benefits the premiums are Tax Deductible with no taxation on the benefits, under IRS Section §106.
♦ Aetna FAQ’s & Explanation is an excellent reference source, including information on Grand Fathered plans.
We do not know of any Insurance Companies that will do a Carve Out for other than Union/Non Union employees, where the union employees have coverage through their union Email dated 1.9.2016 11:58 AM Participation rules and all.
Long Term Care, Dental and other coverages are still OK. See the chart at right on Myths vs Fact for dental & vision coverage for more info.
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Check out the Option during Annual Open Enrollment 11.15 to 12.15 where there are NO Participation rules!
Business Expenses Publication #535
Employer’s Tax Guide to Fringe Benefits Publication #15-B pdf html
1.21.2014 New York Times enforcement rules to remain elusive…
Making health care reform work.com by Blue Cross
Our Webpage on Medical Expense Reimbursement Internal Revenue Code §105 – Actual Code
Technical Links
Tax Facts on Life & Health Insurance & 2016 Health Reform Facts — Rules on Corp. Officer and Highly Compensated Employees Discrimination, etc. Send us your questions and we can look up the codes and interpretations, but cannot give you tax or legal advise.
Relevant Codes – mentioned on Salary Discrimination – Management Carve Outs – Executive Medical
IRC 105 h – Our webpage – pdf of code § 105
Public Health Services Act 2716 0ur Webpage
Erisa §715 – Right to keep Grand Fathered Plan
IRC §9815 – Additional Market Reforms
IRC §4980 H – Shared Responsibility – Employer Mandate – Guidance Notice 2015-17 Health Coverage Reimbursement
Regulation 1.105-11 (c) – Prohibited Discrimination Self Insured Medical Reimbursement Plan
IRS Notice 2011-1 states that §2716 will not be enforced until final rules are issued.
Historical
Cannot write a carve-out class of a Small Employer Group in the states of Indiana, North Carolina, Ohio, South Carolina, Texas Virginia, Wisconsin or Wyoming (expressly prohibited by their state law). compass consulting inc
Related Pages
Carve Outs & Common Ownership
- Common Ownership – Affiliated Companies – Corporations
- Salary Discrimination §2716 – Not enforced
- Similarly Situated Employees