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for the medical care (as defined in section 213(d)11) of the
employee and the employee’s spouse and dependents. Sec. 105(b).
For the reasons set forth below, we agree with petitioners
that pursuant to sections 105 and/or 106 payments by Dreyer Farms
for medical expense reimbursements and health insurance premiums
need not be included in the Weeldreyers’ gross income for 1995,
1996, and 1997.
Section 105(e) requires first, that the benefits be received
under a “plan,” and second, that the plan be “for employees”,
rather than for some other class of persons such as shareholders
and their relatives. Larkin v. Commissioner, 48 T.C. 629, 635
(1967), affd. 394 F.2d 494 (1st Cir. 1968). After giving due
consideration to the record before us, we conclude that Dreyer
Farms’ medical plan (payment of health insurance premiums and
medical expense reimbursements) satisfies both the “plan” and
“for employees” requirements of section 105(e).
Section 1.105-5(a), Income Tax Regs., provides guidelines as
to what constitutes an accident or health plan. A plan may cover
one or more employees, and different plans may be established for
different employees or classes of employees. Id. The
regulations do not require that there be a written plan or that
there be enforceable employee rights under the plan, so long as
11Sec. 213(d)(1)(D) includes amounts paid for medical
insurance in the definition of medical care.
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