What Is A MERP and How Does A Self Funded Health Plan Work?

A MERP (Medical Expense Reimbursement Plan) allows employers to reduce their healthcare costs by self-funding a portion of their healthcare plan.

The most common way to implement a MERP is to replace your current health insurance plan and purchase a high deductible health plan (individual deductibles of $2,500 or higher) using a MERP to fund of the difference between the two plans. This provides the employee with a plan similar to their old plan, and when designed correctly, the company saves money.

Is there a downside? Yes, if the plan is not well designed and there are higher than expected losses, the total cost could be higher than your previous plan.

Legacy Benefits & Insurance Services works with Flexible Benefits Group to design a plan that will work for your company. Our proposal will show the premium savings between the plans, the worst case scenario, the projected loss ratio, and projected funding requirement. This will allow you to make an intelligent decision about whether a MERP will work for your company.