Self-Insured Medical Reimbursement Plan (SIMRP)

A Self-Insured Medical Reimbursement Plan (SIMRP) is an employer-sponsored benefit program structured under Section 105 of the Internal Revenue Code. It combines a certified workplace wellness initiative with tax-advantaged medical reimbursements. The program is funded through the payroll tax savings it generates, allowing businesses to offer supplemental benefits at no net cost while preserving their employees' take-home pay. [1, 2, 3, 4, 5, 6]Key Benefits

Tax Savings: Employers save approximately $500 to $600 in annual payroll taxes (FICA) per eligible employee, as wages set aside for the program are not subject to standard payroll taxes. [1, 2]
Workers' Compensation Reduction: By lowering a company's total gross payroll footprint, employers often see significant reductions—sometimes between 10% and 40%—in workers' compensation insurance premiums. [1]
Employee Perks: Workers receive tax-free reimbursements for medical-related expenses, such as individual health insurance premiums, or access to supplemental telehealth and preventive care benefits. [1, 2, 3, 4]
Customizability: Employers retain control over the budget and reimburseme
telehealth and preventive care benefits. [1, 2, 3, 4]
Customizability: Employers retain control over the budget and reimbursement limits to suit their specific organizational needs. [1]

General Eligibility RequirementsWhile plans can be tailored, IRS-compliant SIMRPs typically require participating businesses to meet the following standards: [1, 2]

Business Size: The company must have at least 10 employees.
Employment Status: Participants must be W2 employees.
Income Threshold: Employees generally need to earn a minimum of $22,000 annually.
Insurance Access: Employees must have access to primary health insurance (e.g., through a spouse, parents, the marketplace, or another employer) and cannot be enrolled in Medicare or Medicaid. [1, 2]

For more specifics on how this IRS-compliant strategy operates, check out educational resources like FPRS Corporation or SIMRP Advantage. [1]telehealth and preventive care benefits. [1, 2, 3, 4]

Customizability: Employers retain control over the budget and reimbursement limits to suit their specific organizational needs. [1]

General Eligibility RequirementsWhile plans can be tailored, IRS-compliant SIMRPs typically require participating businesses to meet the following standards: [1, 2]

Business Size: The company must have at least 10 employees.
Employment Status: Participants must be W2 employees.
Income Threshold: Employees generally need to earn a minimum of $22,000 annually.
Insurance Access: Employees must have access to primary health insurance (e.g., through a spouse, parents, the marketplace, or another employer) and cannot be enrolled in Medicare or Medicaid. [1, 2]

For more specifics on how this IRS-compliant strategy operates, check out educational resources like FPRS Corporation or SIMRP Advantage. [1]

Additional Information (SIMrp)

A SIMRP (Self-Insured Medical Reimbursement Plan) is an IRS-compliant, employer-sponsored program structured under Section 105 of the Internal Revenue Code that funds employee wellness benefits and reduces payroll taxes at zero net cost to both the company and the staff. It acts as a specialized supplemental framework rather than traditional primary health insurance.How a SIMRP WorksThe program is powered entirely by pre-tax and post-tax structural dynamics through standard payroll systems:

Salary Reduction: Employees voluntarily allocate a portion of their gross salary to the wellness plan on a pre-tax basis via a Section 125 plan.
Tax Elimination: Because this allocated income is pre-tax, it is completely exempt from FICA taxes (Social Security and Medicare) and federal unemployment taxes.
Tax-Free Reimbursement: The program immediately issues an untaxed reimbursement to the employee to pay for qualified Section 213(d) health and wellness services.
Net-Zero Impact: The savings generated by lowering the taxable wage base cover the plan's costs, allowing the employee's take-home pay to remain unchanged while adding new medical perks.

Key Benefits for Employers

Substantial Tax Savings: Employers save an average of $550 per participating employee annually in matching FICA payroll taxes.
Lower Workers' Comp Costs: In specific states like California, lower reported gross wages automatically result in reduced workers' compensation premiums.
No Out-of-Pocket Cost: The program requires no upfront investment and is completely funded by the resulting tax restructuring.
Seamless Integration: Employers do not have to switch their primary health insurance carriers, brokers, or existing payroll processors.

Key Benefits for Employees

Zero Out-of-Pocket Expense: Staff members unlock supplemental health coverage with absolutely no reduction in their net take-home pay.
Telehealth & Mental Health: Most plans grant 24/7 access to doctors, nurses, counselors, and health coaches with $0 copays.
Supplemental Allowances: Employees often receive a monthly allowance ($150–$200) to fund extra protections like accident, disability, critical illness, cancer, or life insurance policies.

Compliance and StructureTo remain legally viable, a SIMRP must strictly adhere to federal regulatory frameworks, including ERISA, HIPAA, the Affordable Care Act (ACA), and the IRS. Because these plans involve active employee participation and benefits administration, companies must establish comprehensive written plan documents and typically utilize specialized third-party administrators (TPAs) to manage the day-to-day operations and maintain legal separation of duties.If you are exploring this for a business, let me know:

How many W-2 employees does your company currently have?
Do you currently offer a major medical health plan?
What specific goals (e.g., tax reduction, expanding mental health coverage) are you trying to achieve?

Self-Insured Medical Reimbursement Plan (SIMRP)

For the Employees

additional Benefits

Increase your Profits

Additional Information (SIMrp)

Michael John Valenzuela

Self-Insured Medical Reimbursement Plan (SIMRP)

For the Employees

additional Benefits

Increase your Profits

Additional Information (SIMrp)

Michael John Valenzuela

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