How can a medical reimbursement plan agreement work for you and your business?
A medical reimbursement plan agreement allows employers to pay for employees’ health plan deductibles and payments as well as other medical expenses. Further, these amounts paid to an employee are excludable from gross income on the employee’s tax return. This type of plan is attractive to prospective employees and can help prevention of turnover and increase employee satisfaction, as well as provide tax savings for both the employer and the employee.
In order to form a medical reimbursement plan, the employer must establish a written plan. See an example of a Section 105 medical reimbursement plan here. This plan document outlines the terms and stipulations of the plan, for example, what is reimbursable and how much is reimbursable. Then, as expenses are submitted by the employee, the employer reimburses the employee, as long as the expense fits within the categories above as to what and how much is reimbursable.
Let us know if you are interested in setting up this type of plan for your business, or if you are interested in hearing how a medical reimbursement plan my benefit you and your company, by calling us today at (703) 486-0700.