This section outlines how to implement a Section 105 Medical Reimbursement Plan.
There are three simple steps to implement a Section 105 Plan.
1. Complete Plan Setup & Generate Plan Documents
Complete plan setup with your Section 105 software administrator.
Download and distribute required Plan Documents.
Enroll employees online.
Send Welcome Kits to employees (electronically or printed packets).
3. Employees Submit Reimbursement Requests
Employees incur qualified healthcare expenses and submit proper documentation for reimbursement.
To administer a Section 105 Plan you need to:
Have legal, written Section 105 Plan Documents, and
Have safeguards in place to stay compliant with the IRS, ERISA, HIPAA, and the ACA.
Businesses have three main options for plan administration:
A traditional third party administrator ("TPA")
An Administration Software provider
Because of compliance reasons, and for ease of use and time savings, most businesses use a third party to administer the plan.
In the next section, we’ll discuss Section 105 Administration Software in more detail.