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Plan. Petitioners claim that the plan distributions were made
under section 9.3 of the Plan on account of petitioner becoming
totally and permanently disabled. The Plan contains no
definition of the term “totally and permanently disabled”,
although the Committee, which consisted of petitioner and his
wife, determined that the term meant that a Plan participant
would be unable to do any job.
The cases cited previously, Beisler v. Commissioner, supra
and Hines v. Commissioner, supra, suggest that, to satisfy the
computed-with-reference-to-the-nature-of-the-injury requirement
of section 105(c)(2), an employee health or accident plan must
provide at least two levels of benefits, with the difference in
entitlement at each level keyed to the nature (severity) of the
injury compensated at that level. Whether a plan that has only
one level of benefit, keyed to truly the severest of injuries
(e.g., loss of all limbs or irreversible coma), would qualify is
unclear. See Beisler v. Commissioner, supra at 1308 n.3. We
need not deal with that theoretical possibility, however,
because, although here there was only one level of benefit
specified in the Plan (for total and permanent disability), we
are unconvinced that the term “total and permanent disability”,
as used in section 9.3 of the Plan, encompassed injuries of only
the truly severest kind.
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