The Section 105-HRA plan can have big benefits for the sole proprietor and the single-member LLC with no employees other than the spouse.

It also works well for owners of C corporations who operate the business by themselves.

For full details on the plan, see Blueprint for Employee-Spouse 105-HRA (Health Reimbursement Arrangement), and for an update on the treatment of over-the-counter drugs, see Update 105-HRAs, MSAs, and FSAs to Allow Over-the-Counter Drugs.

In this article, we answer eight questions about the 105-HRA plan. Let’s get started.

Question 1

I set up my 105-HRA plan some years ago. My only employee is my spouse, and I pay all the insurance, medical bills, and drug costs from our joint checking account but ... Log in to view full article.