In a recent ruling, the IRS provided a blueprint where it concluded that employees may allocate employer contributions between a health
reimbursement arrangement (HRA) and a profit sharing plan without creating a 401(k) plan or violating the rules for HRAs. Although PLRs are only applicable to the parties that requested them and are not law, per se, it does shed light on a particular viewpoint by the IRS.
We have been having conversations with our clients about moving away from one-size-fits-all approaches to compensation, benefits, and
retirement plans in response to the varying age distribution and needs of active workforces. For example, an employee with children has more health care needs than an employee approaching retirement. So, why not use the dollars accordingly?