Flexible Spending Accounts, Health Reimbursement Accounts- Employee Benefit Administrator

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Medical Expense Reimbursement Plan (MERP)

A Medical Expense Reimbursement Plan falls into Section 105 of the Internal Revenue Code. The goal of the Medical expense Reimbursement Plan is for the employer to be able to save money. They do this by purchasing a high deductible health plan and using the savings to “buy back” a portion of the deductible.

Before the passage of the IRS code section 105(h), a corporation was allowed to directly reimburse executives, on a self-insured basis, for out-of-pocket medical/dental expenses. and the corporation could do it on a discriminatory basis. the corporation could deduct the expenses and the executive received the money tax-free.

With the passage of section 105(h), corporations can no longer provide this perk on a discriminatory basis, "unless it is part of an insured program". in other words, the corporation cannot just pay executives directly, but can provide this executive perk (on a discriminatory basis) if the benefits are provided through an insured program.

Medcom and Jefferson Pilot have the solution for you.