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Legal Authority for Program The tax-exemption of employer contributions and the tax-exemption of employee disbursements for qualified medical expenses are based on the provisions of Sections 105 and 106 of the Internal Revenue Code (IRC) and IRS guidance under IRS Notice 2002-45, Revenue Ruling 2002-41 and Revenue Ruling 2005-24. Although Sections 105 and 106 do not require a private letter ruling from the IRS, one of VALIC's clients has obtained a private letter ruling from the IRS confirming the tax-exemption of contributions to and disbursements from its HRA plan, which is VALIC's model HRA plan. VALIC offers governmental employers an IRC Section 115 trust for funding of HRA plan contributions. The legal authority for the tax-exemption of earnings on assets within a Section 115 trust are based upon IRC provisions, Treasury regulations and IRS private letter rulings. #40120