FAQ » Vantage - Wellness Employer FAQ

A self-insured medical reimbursement plan (SIMRP) is a separate written employer plan, which reimburses employees for medical expenses that are not provided by either an accident and health insurance policy or a prepaid healthcare plan (e.g., an HMO) that is regulated under federal or state law. In its simplest form, a Section 105 SIMRP is a direct reimbursement plan that allows an employer to pay employees money for medical care expenses, such as insurance premiums.  

A plan document is required to establish a SIMRP (Self-Insured Medical Reimbursement Plan) and should include which medical expenses are reimbursable, how reimbursements will be made, and who is eligible. A SIMRP is considered to be a group health plan subject to the ACA which prohibits limiting coverage for essential health benefits. Because insurance premiums are not considered essential, the plan may limit total reimbursements.  

Eligibility to participate in a SIMRP must be satisfied by both of the following tests: 

  • Percentage test. The plan must benefit 70% or more of all employees or 80% or more of all employees who are eligible to benefit under the plan (provided 70% or more of all employees are eligible to benefit under the plan).  

  • Classification test. The plan must benefit all employees who qualify under a given classification and cannot discriminate in favor of highly compensated individuals. Although certain employees may be excluded from consideration, it must be uniform for all participants but may establish a maximum reimbursement limit. 

The following classification of employees may be excluded from consideration. Workers who 

  • have not completed 3 years of service prior to the beginning of the plan year,  

  • have not attained age 25 prior to the beginning of the plan year, a 

  • re part-time employees (less than 35 hours per week),  

  • are part of a collective bargaining agreement or are nonresident aliens who receive no earned income. 

The ACA increased incentives for employers to adopt self-insured healthcare programs. More focus is being placed on consumer-based approaches with an emphasis on preventative care. One approach is to establish a Wellness and Integrated Medical Plan Expense Reimbursement (WIMPER) program. This unified healthcare approach provides a tax-advantage, affordable means to purchase secondary health insurance products. A medical insurance plan along with a well-designed wellness program encourages employees to take personal responsibility to help minimize healthcare costs. When medical and wellness plans are integrated with a SIMRP, employees that participate in the wellness plan can be rewarded with cash reimbursements to cover medical expenses 

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