What Is A M.E.R.P?
Any IRS-approved health plan or arrangement in which an employer pays employees' or their dependents' out-of-pocket medical expenses is known as a MERP. If properly handled, all reimbursements are paid to the employee entirely tax-free.
Medical reimbursement programs can be used in conjunction with group health insurance programs. As an alternative to group health insurance, the medical reimbursement plan can also be made available as the primary health benefits plan.
Here is a great video to help you understand Executive MERPs:
What Expenses Can A MERP Reimburse?
Any item recognized by the IRS as an eligible medical expense may be reimbursed by a MERP, including individual health insurance premiums. Any restrictions on the list of expenses that can be reimbursed are up to the business.
The following are some of the most commonly reimbursed items:
- Health insurance premiums
- Dental expenses
- Vision care expenses
- Hospital care
- Health plan deductibles
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