No, there are rules. Well, one rule that was relevant to me: you have to have a written Medical Reimbursement Plan. Mine is a 4-page word document -- not sure where I got it, and I can make it available to anyone (see excerpt below).
The first year or two I paid a company call Agriplan to set it up and administer it for me ($250 per year??). But then I found out it was easy to do it myself. All I needed to do was have the document, and keep track of medical expenses.
Here are excerpts:
Medical Reimbursement Plan, Responsive Software
Section 1 Purpose of Plan
1.01 The purpose of this Medical Reimbursement Plan (hereinafter the "Plan") is to provide for the payment for, or provision of, uninsured medical and dental expenses for participating Employees, spouses of participating Employees, and Dependents of participating Employees.
1.02 It is intended that this Plan qualify as an accident and health insurance plan as defined by Code Sec. 105 of the Internal Revenue Code of 1986, as amended ("Code"), and that benefits paid to Employees hereunder be excludable from their gross incomes by reason of Code Sec. 105(b).
Section 2 Definitions
Unless a different meaning is clearly indicated by the context, whenever used in this document, these words shall have the following meaning:
2.01 Benefits. Any amounts paid to a Participant in the Plan as reimbursement for Eligible Medical and Dental Expenses (as defined in Section 2.06) incurred by the Participant during the Plan Year or by the Participant's spouse or the Participant's Dependents (as defined in Code Sec. 152).
2.02 Code. The Internal Revenue Code of 1986, as amended.
2.03 Coverage Period. The Plan Year during which Benefits under this Plan are available.
2.04 Dependent. Any individual who is a Dependent (as defined in Code Sec. 152) of a Participant.
2.05 Effective Date. The First day of January, 2001.
2.06 Eligible Medical and Dental Expenses. Expenses incurred by the Employee, the Employee's Spouse, or the Employee's Dependents, after the Effective Date of the Employee's participation in this Plan and during the Plan Year otherwise allowable as deductions under Code Sec. 213 (without regard to the limitations in Code Sec. 213(a)). For purposes of this Plan, an expense is incurred when the Employee, Spouse or Dependent receives the medical care or services giving rise to the claimed expense.
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Section 3 Conditions for Eligibility
3.01 Any full-time Employee is eligible to participate in the Plan as of the Effective Date provided that the Employee is not a member of a collective bargaining unit of Employees covered by a collective bargaining agreement with Employer as part of which accident and health benefits have been the subject of good-faith negotiations.
3.02 For this purpose, a full-time Employee is an individual who normally works at least one hour per week.
Section 4 Amount of Benefits
4.01 The maximum amount per Plan Year that a Participant may receive as reimbursement under this Plan is $10,000.
4.02 For purposes of this Section 4, reimbursements of expenses for a Participant's Spouse or Dependent are treated as having been received by the Participant.
4.03 Employer shall pay all costs of providing the Benefits due under this Plan. Employer reserves the right to enter into any arrangement, contractual or otherwise, that Employer deems helpful to the proper and efficient operation of the Plan including, but not by way of limitation, the right to enter contracts with insurance companies and third-party administrators.
