NASE Blogs

Health Reimbursement Account

Oct 21, 2009
Q: I'm a single-member LLC.  Am I eligible to establish a health reimbursement account (HRA)?

A:Eligibility for the NASE HRA 105 program isn't determined by your being a limited liability corporation (LLC).  The determination is based on which tax structure the LLC chooses.

As a single-member LLC, you're automatically considered a sole proprietor unless you elect to be recognized as a corporation.  If you elect to be taxed as a sole proprietor filing a Schedule C, then you must be married and hire your spouse as an employee to qualify for the HRA.  If the LLC elects to be taxed as a corporation, then the individual member (being an employee) can participate in an HRA regardless of his or her marital status.

You can learn more about the NASE HRA by going online to www.NASE.org and entering the Quick Link "HRA."  Association members have access to the NASE HRA 105 at no additional cost.  And you could save more than $3,500 in annual income taxes.