A Self-Insured Medical Reimbursement Plan (SIMRP) converts your business's health benefit costs into pre-tax deductions — saving on both income taxes and payroll taxes simultaneously.
A SIMRP is an IRS-recognized employer benefit arrangement that allows a business to reimburse employees for qualified medical expenses using pre-tax business dollars. The reimbursements are deductible as a business expense and are received tax-free by employees. This converts what would otherwise be after-tax personal health costs into pre-tax business deductions — saving on both income taxes and payroll taxes.
Yes. Self-Insured Medical Reimbursement Plans are explicitly recognized under IRS Code Section 105 and have been used by businesses for decades. When properly structured and administered, they are fully compliant with IRS regulations. Kieffer Insurance Group works with clients to ensure every SIMRP is properly documented and administered.
Both SIMRPs and HRAs (Health Reimbursement Arrangements) allow employers to reimburse employees for medical expenses tax-free. The key differences lie in structure, flexibility, and the types of expenses covered. A SIMRP can be designed to cover a broader range of medical expenses and can be structured alongside existing insurance coverage. Kieffer Insurance Group will evaluate which arrangement is most advantageous for your specific business structure.
Businesses that pay W-2 wages are generally eligible for SIMRP strategies. This includes S-Corporations, C-Corporations, LLCs taxed as corporations, and partnerships with employees. Sole proprietors and single-member LLCs taxed as sole proprietors have different options. Kieffer Insurance Group will assess your specific business structure to determine the optimal strategy.
It depends on your business structure, your payroll and the qualified medical expenses the plan reimburses, so there's no one-size answer. Instead of quoting general ranges, Christine looks at your actual situation with you (and your CPA, if you'd like) and shows you whether a SIMRP makes sense for your business and what it could realistically do.
No. A SIMRP is a reimbursement arrangement that works alongside your existing health insurance coverage. It does not replace your health insurance plan. Instead, it converts the out-of-pocket costs associated with your coverage — premiums, deductibles, copays, and other qualified expenses — into pre-tax business deductions.
The first step is a complimentary Health Insurance Strategy Session with Christine Kieffer. During this session, she will review your business structure, payroll, and current benefit arrangements to determine your SIMRP eligibility and estimate your potential tax savings. Book your session at kiefferinsurance.net.
Explore how SIMRP connects with your broader health benefit strategy.