4104 / Must a welfare benefit fund providing postretirement life insurance or medical benefits meet nondiscrimination requirements?

The current status for the tax treatment of these benefits is awaiting regulatory guidance under IRC Section 9815 (effective after a regulation is adopted).¹

Prior to the passage of health care reform legislation, the following applied:

A reserve for postretirement benefits generally may not be included in determining a fund’s qualified asset account limit if the plan of which the fund is a part is discriminatory with respect to those benefits; thus, in effect, a deduction is not available for contributions to prefund discriminatory benefits.²