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We've updated one of our most popular materials. See what's new in our guide to MERPs.

A Guide to Health Reimbursement Plans

Health Reimbursement Plan Design Requirements

In this section we will cover design requirements for Health Reimbursement Plans (HRPs).

A Health Reimbursement Plan (HRP) is designed for individual health insurance reimbursement.

Because of the Affordable Care Act's new "market reforms," an HRP is structured to reimburse employees for:

  • health insurance premiums up to a specified monthly healthcare allowance, and

  • unlimited preventive care with no cost sharing.

To help limit the preventive care liability, an employer could require employees to show proof of having non-grandfathered minimum essential coverage to be eligible for the HRP. That way, the employee receives 100% preventive care services via their own health insurance plan.

Designing a Health Reimbursement Planhealth_reimbursement_plan_design_requirements

Designing a Health Reimbursement Plan is simple. Here are questions to ask as you design a Health Reimbursement Plan:

  • When will the HRP plan start?

  • What monthly healthcare allowance will we provide? Will we provide the same allowance to all employees, or offer different allowances based on employee class or family status?

  • What makes employees eligible for the benefit?

  • Who will administer the HRP?

  • Do we understand the compliance rules with the HRP?

The Comprehensive Guide to the Small Business HRA