Medical Expense Reimbursement Plan (MERP)
Employee and Employer Tax-Advantaged Health Reimbursement
• A medical expense reimbursement plan is an employee fringe benefit which can provide you and your employees with a significant tax break. Under a plan, the eligible employee is reimbursed by your company for out of pocket medical expenses. The plan provides a tax free benefit, so that medical expenses can be paid for with “before tax” dollars
• With an MERP, you as the corporation, can purchase a group insurance plan and establish a reimbursement plan that pays for everything else. (deductibles, co-payments, and even uninsured &ldquoe employee is reimbursed by your company for out of pocket medical expenses. The plan provides a tax free benefit, so that medical expenses can be paid for with “before tax” dollars
• With an MERP, you as the corporation, can purchase a group insurance plan and establish a reimbursement plan that pays for everything else. (deductibles, co-payments, and even uninsured “health related expenses”.) Reimbursements are not taxable income for the employee and are fully deductible by the corporation.
• An MERP offers unlimited flexibility including control over eligibility requirements, qualifying expenses and reimbursement maximums
• A MERP is a self funded deductible account that enables employers to purchase high deductible health insurance policies and self insure portions of employee expenses. This self funded portion is tax deductible.
