Medical Expense Reimbursement Plan

Take your health insurance savings strategy to the next level with a Difference Card MERP 

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The Difference Card specializes in administering Medical Expense Reimbursement Plans (MERP). 

A MERP is not part of a standard benefits offering, but a MERP can be a valuable tool to achieve various employer health plan objectives, such as benefit improvement, cost reduction and tax savings. 

We will outline what a MERP (Medical Expense Reimbursement Plan) is, describe its usage rules and detail several scenarios where a MERP might be an employer’s preferred approach for health plan design, implementation or renewal. 

A MERP could be just the solution you or your client needs to combat the rising cost of healthcare.  

What Is a MERP and How Does It Work?

A MERP, or Medical Expense Reimbursement Plan, is an employer-sponsored benefit plan that helps employees cover eligible medical expenses. It is a type of reimbursement plan that allows employees to receive reimbursement for out-of-pocket medical costs incurred during the plan year. 

In a MERP, the employer establishes the plan and sets the rules and guidelines for eligible expenses and reimbursement. Employees contribute to the plan through pre-tax payroll deductions, reducing their taxable income. When employees incur medical expenses, they submit claims along with supporting documentation to the plan administrator for reimbursement. 

The plan administrator, such as The Difference Card, reviews the claims to ensure they meet the criteria outlined in the plan documents. Once approved, eligible expenses are reimbursed to the employee according to the reimbursement process specified in the plan. 

Additionally, some services like copays can be swiped directly at the doctor’s office on the employee’s Difference Card Mastercard.  

MERPs typically cover a wide range of medical expenses, including doctor’s visits, hospital services, prescription medications, and other healthcare-related costs. However, it is important to note that specific expenses and reimbursement limits may vary depending on the plan design. 

Employers have flexibility in designing the MERP to suit their needs. They can determine the contribution amounts, establish guidelines for eligible expenses, and choose the reimbursement process that aligns with their administrative capabilities. 

MERPs are subject to compliance with applicable regulations, such as the Internal Revenue Code and the Employee Retirement Income Security Act (ERISA). Employers must ensure that the plan meets the necessary legal requirements to maintain its tax-favored status. The Difference Card offers complimentary compliance services to support clients and protect them from penalties.

The Benefits of MERPs 

Medical Expense Reimbursement Plans (MERPs) offer several benefits for both employers and employees: 

  • Financial assistance: MERPs provide employees with financial support by offering reimbursement for eligible medical expenses, helping to alleviate the financial burden of healthcare costs. 
  • Cost control: MERPs allow employers to set contribution limits and choose eligible expenses, giving them more control over healthcare expenses and helping to manage costs effectively. 
  • Tax advantages: Contributions made to MERPs are often tax-deductible for employers, providing potential tax savings via tax deductions. 
  • Customization: MERPs can be customized to meet the specific needs of the employer and the workforce, allowing for flexibility in designing benefit offerings. 
  • Employee satisfaction: By providing access to reimbursement for medical expenses, MERPs contribute to improved employee satisfaction and peace of mind. 
  • Retention and productivity: Offering MERPs as part of a comprehensive benefits package can help attract and retain talented employees, while also promoting a healthier workforce, which can lead to increased productivity. 
  • Compliance: MERPs must comply with relevant regulations, ensuring the plan meets legal requirements to maintain its tax-favored status. 

In summary, MERPs offer financial assistance, cost control, tax advantages, customization, employee satisfaction, retention and productivity benefits, and compliance advantages for employers and employees. These health plans can play a significant role in managing healthcare costs and supporting the financial well-being of employees. 

Advantages of a Difference Card MERP 

While a MERP might be a lesser-known benefit product offering, the advantages are no secret. The ability to fully customize plan designs while also saving the employer money on their health insurance spend is just one of the many reasons to consider a MERP.  


More advantages of using a MERP to design employee benefits includes: 

  • Flexibility: The MERP offered by Difference Card allows employers the freedom to switch health insurance carriers and adjust health plan designs without losing the benefits of the MERP. 
  • Detailed Plan Reporting: Difference Card provides comprehensive reporting, offering daily, weekly, and monthly utilization data by facility and provider, giving employers valuable insights into plan usage. 
  • Savings Tracking: Difference Card tracks the success of the health insurance plan through savings achieved, providing a tangible measure of the plan’s effectiveness. 
  • Guaranteed Savings: Difference Card offers the option to include a reinsurance policy, ensuring savings are guaranteed. 
  • Specific Funding for Services: The MERP provides funds for various medical services, including doctor visits, emergency room care, urgent care, diagnostic testing, hospitalization and surgery, pharmacy expenses, and more. 
  • Auto Substantiation: Claims are automatically substantiated, simplifying the process for employees through debit card integration at the copay level. 
  • Dedicated Account Management Team: Difference Card assigns a full Account Management Team to assist in the success of the plan, including providing employee communication materials in printed English and Spanish language guides and customized client videos. 
  • Compliance Package: Difference Card offers a comprehensive compliance package, including plan documents, Summary of Benefits and Coverage (SBCs), Summary Plan Descriptions (SPDs), and non-discrimination testing. 
  • Premium Equivalent Rates: Difference Card’s Actuarial Team calculates premium equivalent rates, allowing employers to set employee and employer contributions and COBRA rates.

Medical Expense Reimbursement Plans are so effective because, unlike an HRA, they can help employers purchase cost-effective single options from insurance carriers and customize funding to offer multiple plans to employees. 

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Employee Education – Benefits of MERP 

The Difference Card Account Executive Team will guide employer groups through every step of the process during implementation and open enrollment. Each Difference Card client gets a dedicated Account Executive along with virtual Open Enrollment Resources page that contains client specific benefit plans, a step-by-step video guide on how to use The Difference Card and any additional necessary educational materials.  

When discussing MERPs with their employees, employers should focus on clear and transparent communication. It is essential to explain the purpose and benefits of the MERP, emphasizing how it helps employees manage their medical expenses effectively.  

The Difference Card will provide comprehensive information about the eligibility criteria, reimbursement process, and available services. We will also highlight any flexibility and customization options that the MERP offers. Clear communication about contribution amounts, coverage limitations, and the role that The Difference Card plays is crucial.  

Employers should encourage open dialogue, addressing any questions or concerns employees may have, and provide educational resources from The Difference Card to ensure employees understand how to maximize the benefits of the MERP.  

By fostering open and informative discussions, employers can promote employee engagement, satisfaction, and utilization of the MERP to its full potential.

Discover The Difference. 

Explore the possibilities that The Difference Card offers, including the potential to enhance your employee benefits and streamline healthcare management. 

In addition to Medical Expense Reimbursement Plans (MERPs), The Difference Card offers a comprehensive suite of product offerings, including Health Reimbursement Arrangements (HRAs), Health Savings Accounts (HSAs), Dependent Care Accounts, Flexible Spending Accounts (FSAs), Difference Benefits Admin System, Lifestyle Spending Accounts, Commuter and Transit Accounts, Dental Difference, The Difference Guarantee, and Compliance Services.  

Each of these offerings is designed to provide tailored solutions, enhance tax advantages, and simplify administrative tasks.  

With the ability to stack multiple benefit options onto one card, The Difference Card is committed to providing comprehensive health benefit plans that align with your client’s unique needs.  

Take the next step in optimizing your benefits strategy by exploring The Difference Card’s full range of offerings and discovering how they can revolutionize your employee benefits experience. 

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