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.  

Top 5 - 10 causes of Long Term Disability Claims 

Lower back disorders  ♦   Depression  ♦ Coronary heart disease, arthritis and pulmonary diseases  (Met Life♦  Disability Can Happen    CDC Statistics

Top 5 causes of Disabilty

Click here to visit our website on Disability Payments - Insurance 

Consumer Links

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 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.

Wraparound coverage to qualify as an excepted benefit Learn More⇒  Federal Register Vol 80 # 52 –  3.18.2015


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

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