Alternate Funding

Turner, Wood & Smith Employee Benefits has extensive experience in alternative risk transfer markets and provides clients with comprehensive information about prospective options.  These types of plans are especially beneficial to companies that want to maximize the financial effectiveness of their benefits program over the long term.

Self-Funding

Self-funding is a way to maximize management of the insurance portion of your cash flow by eliminating insurance company margins while maintaining the most favorable balance of risk and cost effectiveness.  An employer has a self-funded group health plan if the employer assumes the financial risk for providing health care benefits to its employees.  Rather than paying fixed premiums to an insurance company who in turn assumes the financial risk, the employer pays for medical claims out-of-pocket, as they are incurred.  Generally, employers who have self-funded plans will set up special funds to earmark corporate money to pay for employee medical claims.

MERP

A Medical Expense Reimbursement Plan (MERP) allows an employer to reimburse employees for qualified medical expenses which are not income to the employee and are fully deductible as an expense by the employer. 

A company can use a MERP as a way to lower medical insurance costs but still cover the employees qualified medical expenses tax free.  The employer has a defined benefit maximum per year.  If and when an employee has a claim, the employer will reimburse up to a certain benefit maximum.  MERP can only have employer contributions, and there is no rollover permitted.  The employer keeps the funds, not the employee.