Duquesne Law Review


The Internal Revenue Service has issued proposed regulations concerning cafeteria plans which include a provision denying favorable tax treatment to certain "cash out" medical reimbursement accounts established pursuant to section 105 and offered as a cafeteria plan benefit. The author analyzes the legislative intent surrounding enactment of the section 105 exclusionary provisions and concludes that the proposed regulations represent an act of overreaching on the part of the Service. Further, the author suggests that the proposed regulations are premature in light of the potential effect of cash out benefit plans on the economic policy of health care cost containment.

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