MERP (Medical Expense Reimbursement Plan)
MERPs, Section 105 Plans, are intended to provide medical benefits to employees on a tax-free basis and tax deductible to the employer. Employers utilizing a MERP fund claims by promising specific employer contributions at a certain benefit design.
MERPs have been around since the 1960s. The IRS has issued guidance allowing these employer-funded health reimbursement plans. Employers can fund completely or charge their employees a 'premium' for this employer-funded portion of their health plan.
Claims reimbursements occur as claims are incurred. No pre-funding is necessary. If no claims occur then no employer funding is required. No funding rollover is required.
Many employers are implementing insured plans with high deductible health coverage, but with first dollar benefits. These benefits are centered around a benefit design, designed by the employer. They may include co-pays, co-insurance and employee/family deductibles. Expenses submitted to the employer must be substantiated and are usually based upon negotiated provider discounts under the high deductible medical insurance.
These plans are designed to heighten employee awareness of health care costs. They are intended to cover all employees and their dependents that are covered by the high deductible health insurance plan. Employers can specify which expenses are eligible for reimbursement and whether or not those expenses are subject to deductibles, co-insurance and/or co-payment provisions. Most plans require a claim to be allowed by the high deductible health insurance plan in order to qualify for the employer's MERP. Many plans utilize co-pays, co-insurance and deductibles to aid in controlling costs and utilization.
ASI provides the following services for employers implementing a MERP:
- Plan Design and Implementation
- Plan Document, SPD and Other Necessary Forms
- Enrollment and Educational Assistance and Materials
- Claims Processing, Funding, Disbursements & Administration
- Compliance for IRS, ERISA, COBRA & HIPPA
- Employer and Employee Reporting
- Illustrate Cost Comparison of MERP Approach v. Traditional Fully-Insured Plan
- Assist in Plan Design
- Draft Plan Documents, Including Plan Document, Summary Plan Description and Corporate Resolution
- Assist Broker in Plan Presentation
- Assist in Group Enrollment
- Provide Participant ID Cards and Plan Materials
- Provide Claims Procedures
- Provide RX Network
- Enter Claims Daily, Process and Disburse Claims Weekly
- Provide Standard Reports
- Provide Plan Review
- Provide COBRA Administration Services
- Troubleshoot Claims Not Properly Processed by Providers