A self-insured medical reimbursement plan is an effective way for employers to save on taxes while providing certain healthcare benefits to their employees. This strategy enables employers to prioritize the physical well-being of their employees while minimizing their overall tax liability. This plan has several advantages, but is limited to specific options. It is not an elaborate and advanced plan like Lumara Health that offers the benefits of SIMERP with a Section 125 plan. Neither does this plan help employers significantly reduce medical claims.
For employers seeking to provide more than just a self-insured medical expense reimbursement plan, Lumara Health is the ideal choice. Let’s see how and explore the self-insured medical reimbursement plan in detail.
Understanding Self-Insured Medical Reimbursement Plan
A Self-insured medical reimbursement plan is a health benefits arrangement where an employer assumes the financial risk of providing healthcare benefits to employees, instead of purchasing traditional insurance. Under this plan, the employer reimburses eligible medical expenses directly, often up to a specified limit. It offers flexibility in plan design, potential cost savings, and better cash flow control. Typically governed by ERISA and IRS rules, these plans may be paired with stop-loss insurance to protect against high claims. Self-insured plans are ideal for mid-to-large-sized businesses aiming for cost transparency and customized healthcare solutions tailored to their workforce’s needs.
Key Benefits of Self-insured Medical Reimbursement Plan for Small Business
A self-insured medical reimbursement plan can offer small businesses a more flexible and cost-efficient approach to employee healthcare. It allows tailored coverage while potentially reducing premium costs and enhancing cash flow management. Here are the key benefits included:
- Cost savings: Avoids high premiums of traditional insurance plans.
- Plan customization: Tailors benefits to meet specific workforce needs.
- Improved cash flow: Pays for claims only as they arise.
- Transparency: Offers greater insight into healthcare spending.
- Regulatory compliance: Meets IRS and ERISA requirements efficiently.
- Employee satisfaction: Provides meaningful, responsive healthcare benefits.
Why is a Self-Insured Medical Reimbursement Plan a Popular Option for Small Businesses?
A self-insured medical reimbursement plan is a popular option for small businesses because it offers greater flexibility, cost control, and transparency compared to traditional group insurance. By reimbursing employees directly for eligible medical expenses, employers can avoid high premiums and only pay for actual claims. This approach allows for customized benefit design that aligns with both budget and employee needs. Additionally, pairing the plan with stop-loss insurance helps protect against unexpected high-cost claims, making it a practical and scalable solution for growing businesses.
Lumara Health: Combining a Self-Insured Medical Reimbursement Plan with a Section 125 Plan
The Lumara Health plan is a fully managed, IRS-compliant health-benefits solution that integrates three core components: a Section 125 cafeteria plan framework, a Preventive Care Management Plan (PCMP), and a Self-Insured Medical Expense Reimbursement Plan (SIMERP). It operates alongside existing health insurance without disrupting current coverage, requires no upfront cost to the sponsor, and offers automated administration. The PCMP delivers proactive care services such as wellness screenings and telehealth while the SIMRP reimburses eligible out-of-pocket medical expenses tax-free. Together, these features reduce payroll tax burdens, streamline compliance, and enhance access to preventive and medical support.
Employer Benefits of Lumara Health Plan
The Lumara Health Plan offers a streamlined, compliant approach to healthcare benefits that reduces employer costs and administrative complexity. The key employer benefits includes:
- Saves around $600 annually per W-2 employee
- Cuts total healthcare costs by 5–10%
- Requires no upfront investment to implement
- Minimizes HR workload through automated administration
- Lowers employer payroll tax liability
- Ensures full IRS and ERISA compliance
Employee Benefits of Lumara Health Plan
The Lumara Health Plan offers employees and their families a wide range of holistic, no-cost health services focused on accessibility, preventive care, and overall well-being while also improving financial outcomes. Here are the key employees benefits:
- Boosts take-home pay by approximately $100/month
- Provides 24/7 telehealth and virtual care access
- Extends coverage to spouses and dependents
- Includes Employee Assistance Program (EAP) services
- Offers mental health and counseling support
- Access to Mayo Clinic wellness resources
- Supports addiction recovery and behavioral health
- Provides couples counseling and emotional support
The Bottom Line: Explore a Smarter Way to Manage Benefits
In 2025, more employers are turning to the self-insured medical expense reimbursement plan (SIMERP) for its ability to reduce healthcare costs, improve plan flexibility, and support workforce well-being. As organizations seek tax-advantaged, scalable benefits solutions, SIMERP offers a compelling alternative to traditional insurance models. Choosing Lumara Health ensures seamless implementation, full compliance, and expert-managed administration, delivering measurable savings and enhanced care access without adding complexity. For forward-thinking employers, Lumara Health is the trusted partner in transforming benefits strategy with confidence.
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