C Corp.-Medical Ins.

[Bird Legs]

Client, C Corp. has a medical insurance plan covering all employees.
The president decides the coverage is not right for him so he trys to talk the
employees into changing plans. The respond with NO because of pre-existing
health problems.
President says okay, I am going to take out a separate policy on me & my family.
He pays, out of corporate funds, $200.00 application fee and an additional $390.00
for the first month premium.
He is rejected because of pre-existing health problem. The insurance co. will reimburse
the corporation the premium, $390.00 but not the application fee, $200.
Is the $200.00 a deductible expense?

[Bees Knees]

I have not seen anything that requires an employer to buy medical insurance coverage from just one insurance plan. I believe I read somewhere that for tax purposes, a section 106 employer provided health insurance plan can even discriminate against certain employees. Whereas a section 105 health reimbursement plan cannot.

So I would say in your situation, the costs of investigating a new health plan that was only going to cover certain key employees is still deductible.

[OldJack]

Discriminate

I agree with Bees Knees that the expense is deductible. C-corp health insurance program can discriminate. I don't know if it is spelled out in the regs as such, but generally it is considered a tax-free benefit negotiated as a part of employment.