Diagnostic reimbursement plans for executives have been common for over 30 years. They allow an employer to pay for or reimburse such employees these expenses with dollars that are deductible to the employer and not taxed to the executive[1].  This exception to the self-insured health plan nondiscrimination rules is allowed by Reg. 1.105-11(g).

However, IRS Notice 2013-54[2] provides that so-called Health Reimbursement Accounts cannot be offered by employers (except solely to retirees or single participant plans) unless the participants are also enrolled in a major medical plan of the employer or the employer's spouse.

The question then is whether the executive physical plan is an HRA for this purpose. While not free from doubt, the better answer is that such a plan is not an HRA.