The plan is a no risk add-on to the existing company sponsored Group Health Insurance, and it saves the company money on taxes as well as premium costs. It is a “self-funded, self-defined 105 Benefits Plan that makes it possible for all eligible employees to set aside pre-tax dollars each pay period into a 105 Reimbursement Account for the purpose of paying their out-of-pocket medical expenses. The plan is based in part on the IRS Code 105, which employers have been using for over 60 years. Congress passed the law in 1954. Most major corporations have used a variation that built a larger than usual reimbursement plan for their top executives at some time or other. However, our plan enables all employees to participate and as such complies with all non-discrimination regulations. Our plan has operated for 6 years with success and has even been audited by the DOL, who oversees the plan.
The plan is sponsored by the employer with numerous advantages for them, and enables the employee to establish a larger than usual medical reimbursement fund without any out-of-pocket costs to either the employee or the employer. As a result, employers are able to reduce their costs with higher deductible plans, and the higher risk deductibles are covered by the medical reimbursement account.