We know this program can feel new or different compared to traditional benefit models. That’s why we’ve gathered the most common questions — and straightforward answers — to help you quickly understand how SIMERP works, why it’s compliant, and what kind of impact it can make for your business and employees.
SIMERP (Self-Insured Medical Expense Reimbursement Plan) is an IRS-compliant program that allows employers to provide additional tax-advantaged benefits to employees while significantly reducing payroll taxes.
Employers typically save on average $600 per year per employee by lowering payroll tax obligations. These savings can be reinvested back into business operations or expanded employee benefits.
No. Employees keep 100% of their take-home pay while gaining access to new tax-free benefit allowances they can use for health and wellness services.
Yes. SIMERP uses established provisions (§§105/106/125/213(d)). The plan reimburses only qualified medical expenses with required substantiation. There are no fixed cash wellness payouts. Properly documented, this mirrors HRA/FSA-style benefits.
SIMERP is most effective for organizations with 30 or more employees, but can be adapted for smaller employers as well.
By reimbursing qualified medical expenses on a pre-tax basis through a self-insured plan, you reduce taxable wages and associated payroll taxes. Typical net savings average about $600 per employee per year.
Yes. SIMERP integrates seamlessly with existing group health insurance or self-insured medical plans, creating additional tax efficiencies without replacing current benefits.
Employees benefit by receiving additional tax-free allowances for health and wellness expenses, improving overall satisfaction and retention while maintaining their full take-home pay.
Employees can use SIMERP allowances for eligible medical, dental, vision, wellness, and preventive care expenses as defined under IRS Section 213(d).
Standard substantiation (receipts or EOBs) for §213(d) expenses. We provide plan docs, employee communications, and an audit-ready paper trail.
There is no direct cost to employees, and employers typically experience net savings after implementation. Administrative fees may apply but are generally offset by payroll tax savings.
Implementation timelines vary but most organizations can be fully operational within a few weeks once plan documents are in place and employees are enrolled.
Those schemes pay fixed cash amounts unrelated to actual medical expenses and have been flagged by the IRS. SIMERP reimburses only qualified, substantiated medical expenses — the core requirement for tax-free treatment.
Any other questions, do not hesitate to reach out!
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