Insured Medical Reimbursement is a product that assists the employer weather the storms of the rise in medical insurance costs for their employees. While employer coverage is skyrocketing, the employer’s today seem to pass some of these expenses to their employees. Either by raising the premium contribution, or more commonly, raising the employees out of pocket (deductible and coinsurance). The impact of these added costs are lessoned when the employer provides the employee the ability to fund these expenses partially with tax savings.
IRS, code section 105 has provided the means for an employer to provide funding for un-reimbursed medical expenses, but this code requires the employer make those programs available to everyone. Further, code section 125 (commonly called a flex plan) provide tax saving possibilities when the employee budgets in advance the amount the employee wishes to set aside to fund these expenses, should they occur. Draw backs to a 125 plan is that it requires the employer to make this available to everyone, but it also requires the employee to anticipate how many dollars he/she wishes to set aside at the beginning of the year. This opens one of the biggest concerns of most employees and it is called the “use it or lose it” provision. The employee is required to use all of their budgeted deposits or they forfeit them when the year ends.
An employer pays an annual premium for key executives (determined by class) to be covered under the reimbursement plan. When an insured has eligible reimbursable expenses, they are submitted to BeniComp Select for reimbursement. The claim is submitted by the employer, and BeniComp Select reimburses the key executive directly.
top |
