Section 105 Medical Reimbursement Plan

Last Updated: February 21, 2018

Definition - What does Section 105 Medical Reimbursement Plan mean?

A Section 105 medical reimbursement plan is a health insurance plan in which employers self-fund their employees' health insurance costs. This allows them to avoid paying for expensive group health insurance plans.

This reimbursement, moreover, is often tax-free, further reducing the costs to employers.

Insuranceopedia explains Section 105 Medical Reimbursement Plan

The Affordable Care Act (ACA) put into place a number of regulations for Section 105 medical reimbursement plans. For example, under the ACA, these plans cannot limit the amount of coverage provided for essential healthcare needs. In other words, employers cannot deny coverage for procedures such as cancer treatment simply because they are expensive.

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