I often wonder why some concepts don’t get the publicity they deserve, so today I’d like to give some props to Medical Expense Reimbursement Plans (MERPs). I’ve found them to be a creative and powerful method for rewarding your valuable executive team and/or their families. The strange thing is that MERPs have been around for decades, but I don’t see many consultants or employer groups talking about them – and while they’ve gone through some compliance retooling over the years, they are alive and kicking today. It’s surprising how many folks don’t know they still exist!
So, what’s the deal? Long story short: MERPs are fully-insured, compliant insurance reimbursement plans designed to supplement primary plans (like medical, prescription, dental and vision) giving your executives or their families closer to 100% coverage on out-of-pocket costs for everyday and unexpected health expenses. This is very different from other supplemental plans, like hospital indemnity, which provide a lump sum based on specific events or illnesses. MERPs are true gap coverage that can reimburse a wide variety of medical expenses (e.g. doctor and prescription copays, Lasik surgery, IVF, acupuncture, child and adult orthodontia, massage and chiropractic care, etc.).
MERPs come with advantages for the employer as well – they’re a way to differentiate your firm from the competition when attracting and/or retaining talent, help your company to expand coverage for valuable team members or lessen the impact of plan modifications, enhance executive compensation and do more with employer dollars. Which brings me to my next point. Every group I meet with is looking for ways to do more with their dollars, and that’s exactly what MERPs do – I’ve seen employers spend $12,000 and the executive gets $100,000 of coverage. If that’s not putting employer money to good use I don’t know what is.
Executives play key roles in every organization and in today’s environment of shifting medical costs to employees and scrutinizing executive salaries, MERPs can be a valuable tool. Feel free to contact us for more on MERPs or to discuss which executive comp strategies are best for your employee group.