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SIMERP | Self-Insured Medical Expense Reimbursement Program

What is the Self-Insured Medical Expense Reimbursement Program?

The self-insured medical expense reimbursement program (SIMERP) is a preventative care management program that Is IRS, HIPAA, & ERISA compliant and available at no net cost.

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Why SIMERP?

An employer sponsored workplace program that provides employees the opportunity to upgrade their benefit package with a certified wellness program while reducing both the employer's and employee's health care costs and expenditures.

SIMERP Explained in Seconds.

Self Insured Medical Expense Reimbursement Program (SIMERP) is an employer-sponsored workplace program that allows employees to upgrade their benefits while reducing both the employer’s & employee's healthcare costs & expenditures. SIMERP reduces business payroll by up to $900per W2 employee, reducing your workers' comp premiums without changing carrier.

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Preventative care management program is a participatory program

The 11 Participatory model was developed under the Affordable Care Act (ACA) Federal Register, Vol. 78, June 3, 2013, pg. 33,161

This model is an integrated 105 planrequiring at least one activity per year. 42 U.S. Code 300gg-4 {j)(3)(c)

Program Eligibility

  • W2 Employee Must be a W2 Employee
  • Health Insurance Must have qualified Health Insurance or our EMP MEC Plan
  • Financial Qualify Should be full time (30 hours/week) or financial qualify ($26,240)
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Effortless Savings

Employer Features

  • Reduce worker's comp by up to 30% while keeping your broker and policy in place.
  • Mitigate Monday morning work comp claims (70% of work comp claims happen on Monday morning).
  • Reduce payroll taxes by an average of $879 annually per employee.

Employee Features

  • Each employee has access to a participatory preventative care management dashboard.
  • Employees will receive guaranteed issue accident, disability, critical illness with cancer, & whole life insurance(no health questions to qualify).
  • They have access to coverage and resources without affecting their take-home pay.

HR Features

  • Works with every payroll company seamlessly.
  • Technology allows maximum efficiency, minimal lifting for hr, payroll, and team.
  • White glove concierge service with a dedicated client service manager.
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Internal Revenue Codes

Wellness

  • IRCs106(a) - ERISA
  • IRC 5125
  • IRCs213(d) - ADA
  • IRCS105.11
  • IRCs105(b) HIPAA

Medical

  • IRCS213(d) ACA

Pre-Tax

  • IRCS 213(d)
  • IRC s125
  • IRCS106(a)

Post-Tax

  • IRCS 213(d)
  • 104.(A)(3)
  • IRCS 105(b)
  • 1.105.11(k) (1)
  • 1.105.11(i)
  • 1.105.11(k) (2)

SIMERP

Medical services are a key component

The Program is always paired with an ACA approved medical plan to make an integrated 105 plan.

Deduction of the plan is pre-tax eligible

The deduction of plan cost from an employee's gross wages is addressed by IRC Codes 106 (a) .TheOffice of Chief Counsel Internal Revenue Service Memorandum (Number: 201703013, Dated: 1/20/2017)states: "The value of coverage by an employer-provided wellness program that provides medical care(as defined under §213{d) is generally excluded from an employee's gross income under§106(a). The pre-taxing of this deduction, made possible under a Self-Insured Medical ReimbursementPlan and a Cafeteria Plan (§ 125), creates the reduction of taxable income, generating savings for the employee and the employer.

Plans designed for compliance

The Plan is a Self-Insured Medical Reimbursement Plan (SIMERP) and was purposely created, thoroughly researched, and found compliant with IRC 213(d), 106(a), 105(b), 1.105-ll(i) , and 104(a) (3)codes, and all applicable IRS memos, ERISA regulations, HIPAA, and the ADA.

Post-tax program reimbursements

Any reimbursements or payments for medical care (as defined under §213(d) provided by the programis excluded from the employee's gross income under §105(b)." Also, Code 1.105-ll(i) & 104(a)(3).Reimbursement guidelines are spelled out in the SIMERP plan documents provided by EHP

Reimbursement allowances

Allowable pre-taxing and reimbursement amount based on the Health and Human Services report (July2016) and national average cost total for the monthly value of benefits. Amounts allowed are also based upon fair market value of benefits provided through the Program for preventative services that an213(d) compliant. All regulations and guidelines of the EHP Self-Insured Medical Reimbursement Plan(SIMERP) regulations and guidelines are used for benefits and paired with a Section 125 Cafeteria Plan.SIMERP must be paired with medical insurance for an integrated 105 plan.

100 Employees Example

  • 100 employees X average $14,640 reduced gross pay = $1,464,000 in gross payroll reduction. The work comp is based on that number so that would go away (it would be safe to assume that based on a few states that this wouldn't apply, that 75% of this number is a conservative estimate).
  • 100 employees X $879 per employee in potential payroll tax relief = $87,900 per year potential payroll tax relief.
  • 100 employees X $2,500 on average a year in benefits= $250,000 in extra benefits with no health questions at no net cost to the employer

22,000 Employees Example

  • 22,000 employees X average $14,640 reduced gross pay = $322,080,000 in gross payroll reduction. The work comp is based on that number so that would go away (it would be safe to assume that based on a few states that this wouldn't apply, that 75% of this number is a conservative estimate).
  • 22,000 employees X $879 per employee in potential payroll tax relief= $19,338,000 per year potential payroll tax relief.
  • 22,000 employees X $2,500 on average a year in benefits = $55,000,000 in extra benefits with no health questions at no net cost to the employer.

EHP Compliance

Plan Documents

The PCMP document specifies the benefits provided as part of the employee wellness program. All benefits are213(d) compliant, which allows the pre-taxing of the wellness premium and the reimbursement of that premium.

Cafeteria Plan

The wellness program uses a Section 125Cafeteria Plan that is funded under IRS code106(a), allowing the pre taxing of 213(d)compliant medical expenses.

SIMERP

The SIMERP, is used to reimburse participating employees dollar-for dollar resulting in no reduction in take home pay; reimbursement is not based upon claims, but rather on the benefits of the PCMP plan.

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Using Your Allotment Fees

$89.00 Wellness Plan (entire family at no additional cost)

  • Telemedicine
  • Urgent Care
  • Diet and lifestyle (smoking, exercise)
  • Other patient benefits

$109.00 MEC Plan (Available to other family members at a fee)

  • All 64 preventive services required by the Affordable Care Act
  • Doctor / Specialist visits (no deductible to meet)
  • Urgent care (no deductible to meet)
  • 120+ of the most common medications at no change

$100.73 Available for ancillary benefits

  • Dental
  • Vision
  • Accident
  • Hospital Indemnity
  • Life Insurance
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Plan Highlights

  • Covers preventive and wellness services at no cost including: Annual Wellness Exam, Immunizations, andSTI Screenings.
  • This plan has an Open Network provided by AXA Assistance USA. Choose your own provider without the limitations of Network Restrictions.
  • Affordable doctor visits & Urgent Care co-pays.
  • Enhanced Rx Program featuring deeply discounted medications. (Powered by Shield PBM, see additional plan features)
  • Acute Drug Formulary includes 37 medications (Powered by Shield PBM, see additional plan features)

EHP MEC Plan - For Employees without Qualified Coverage

This Plan Includes

Minimum Essential Coverage

Network

AXA Open Access

Out of Network Coverage

N/A

Individual Medical Deductible / Out-of-Pocket Limit

$0 / $400

Family Medical Deductible / Out-of-Pocket Limit

$0 / $800

Individual / Family Pharmacy Out-of-Pocket Limit

$5,000 / $10,000

Preventive & Wellness (covered with no out-of-pocket expenses).

100%

Physician and Office Utilizations

8 Utilizations per year (UPY)

Primary Care Visit

$25 co-pay

Specialist Visit

$35 co-pay

Urgent Care Visit

$50 co-pay

Maternity Pre/Post Natal

Not Included

Mental/Behavioral Health

Not Included

X-Rays & Lab

Preventative Only

Imaging

Preventative Only

Emergency Room

Not Included

Emergency Transport

Not Included

Outpatient/In-Patient Services Hospital Admission

Not Included

ACA Drug Formulary

Included

Enhanced Rx Discount Program (Powered by Shield PBM)

Included

Acute Drug Formulary (Shield PBM)

Included

Frequently Asked Questions

Is this a legal program?
100% legal. This is a tax qualified Self-Insured Medical Reimbursement Plan with a wellness focus that uses tax advantage provisions under the Internal Revenue Service codes "Section 125 Cafeteria Plan and codes 105, 106, and 213(d)" and ACA wellness rules.
Can benefits be obtained on my spouse and dependents?
Yes, all benefits can be modified to cover spouse and/or dependents.
Can I cancel this program at any time?
No, because the participant is pre-taxing the wellness program under a Section "125" Cafeteria program, the IRS has certain rules that must be followed such as: participant cannot make any changes to the program until "Open Enrollment" each year unless there is a qualifying event. An IRS approved qualifying event allows the participant to make changes during the plan year that are consistent with the event. An UTC Wellness advisor will explain this upon enrollment.
Who decides where the tax savings must be spent?
By participating in the plan, the employer decides the details regarding the Self-Insured Medical Reimbursement plan including, what is reimbursed, how often reimbursement is made, and who is eligible to participate.
What happens if I miss a day's pay? Will I have to pay for the
benefits out of my take home pay?
The preventative care management calculates the Wellness Reserve at 95% of participant's annual income. Therefore, if the employee should miss a couple of days during the year, there should be enough in the reserve to pay the premium amounts without affecting take home pay.
What effect will this have on my take-home pay?
The participant will see additional line item deductions on his/her paycheck. To accurately see the effect on take-home pay, compare two identical paychecks (i.e. hours worked, same pay rate, etc.) and that participant will see either a very slight increase in pay or no difference in take home pay.
What are the participation requirements under the program?
Yes, after enrolling in the program, participant is approaching retirement age as Social Security is calculated on a 35 year average. One of the benefits we make available to employees is a guaranteed issue cash value life policy that usually accrues cash value at a higher rate than Social Security. (If participant has specific questions on this effect, please consult a CPA).
Are my year-end taxes affected?
Participant's year-end taxable income is lowered by the wellness contribution. For specific questions, please contact your tax adviser.
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The following will provide answers to some of the most common questions. If you don't see your question, feel free to email info@universaltaxcredit.com for assistance.

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