Innovative Strategies for Health & Wellness Programs: Unlocking Tax Benefits and Cost Efficiency

How Employers Can Enhance Employee Benefits and Reduce Expenses.

In today's competitive job market, employers constantly seek ways to enhance employee benefits without escalating costs. Rising health insurance premiums pose a significant challenge, yet innovative solutions like self-funded healthcare platforms are emerging as a viable alternative to traditional insurance models. This approach not only offers a pathway to increase employee benefits but also to manage expenses more effectively.

Understanding Self-insured Medical Reimbursement Plans (SIMRPs): A Game Changer

At the heart of this strategy lies the Self-insured Medical Reimbursement Plan (SIMRP), a flexible employer-sponsored plan designed to reimburse employees for medical expenses not covered by standard health insurance policies. This model aligns with the Affordable Care Act's (ACA) emphasis on wellness and health promotion activities by incentivizing employers to support their workforce's health and wellness endeavors.

Key Insights into SIMRPs

1. Essence of SIMRP: A SIMRP is an employer-established plan that directly reimburses employees for specific medical expenses, including insurance premiums. This approach fosters a supportive workplace culture by aiding employees in managing their healthcare costs.

2. Structure and Compliance: Establishing a SIMRP requires a detailed plan document outlining reimbursable medical expenses, reimbursement procedures, and eligibility criteria. Designing these plans within the ACA framework is crucial to ensure they don't limit coverage for essential health benefits despite the flexibility to restrict total reimbursements.

3. Eligibility and Participation: Participation in a SIMRP is governed by comprehensive eligibility criteria, ensuring that the benefits are extended to employees fairly and equitably.

Our BizPower Benefits specialists can answer all the questions on how employers can leverage wellness and integrated medical plan expense reimbursement programs (WIMPER) to offer more robust employee benefits while simultaneously achieving cost savings by answering questions on implementing these strategies. The transition towards consumer-directed health plans (CDHPs) and the strategic shift of financial responsibility to employees highlight the evolving landscape of employee health benefits. Through SIMRPs, employers can navigate the complexities of health insurance costs, reinforcing their commitment to employee well-being and financial stability.

Here are some of the questions we can help with:

How does a WIMPER program save employers money?

Why would employees want to participate in a WIMPER program that combines a healthcare plan with a wellness plan and a SIMRP?

How should a WIMPER program be designed?

Are reimbursements for LTC insurance premiums subject to the same requirements as other insurance that covers medical care?

What is an HSA?

What is a Voluntary Employee Benefits Association (VEBA) Trust?

Are employees required to have major medical insurance through their employer or elsewhere (e.g., spouse or domestic partner) in order to qualify for medical reimbursements?

What are the most common types of wellness plans offered in conjunction with group health plans?

How does a wellness plan comply with requirements under HIPAA, as well as the newly revised ADA rules which limit reimbursements for wellness plans if the plan requests health-related information or requires a medical examination?

In order to remain compliant with the IRS requirements, how is the deduction and reserve handled under a WIMPER program for an employee who is no longer meeting all of the plan participation requirements (i.e., the employee terminates contributions under the plan year)?

How do cash reimbursements from a WIMPER program qualify as medical care, as defined under 213(d) with respect to healthy employees having no risk factors, if the program does not reimburse a participant for medical care?

If an employee elects to receive a cash reimbursement in lieu of purchasing qualified benefits, is it taxable?

Can highly compensated employees contribute additional amounts to a cafeteria plan and subsequently receive more medical reimbursements under a WIMPER program?

What is a fixed indemnity insurance plan and is it allowed as part of a wellness plan?

What guidance did the IRS provide regarding self-funded health plans?

Would a repeal of the ACA have an impact on wellness plans that are part of a WIMPER program?