Medical Expense Reimbursement

Medical Expense Reimbursement: A Guide For Small Businesses

The cost of medical care has skyrocketed in recent years, making it more important than ever for small businesses to consider the use of medical expense reimbursement plans. Medical expense reimbursement plans are employee benefits that allow employees to submit claims for medical expenses not covered by insurance and receive some or all of the reimbursed amount back as income. This type of plan can help employees offset the high cost of medical care and can attract and retain talented workers at a lower compensation rate. 

In order to begin taking advantage of a medical expense reimbursement plan, there are several steps a small business must take. The first is to choose a plan administrator. This person should be familiar with the different types of reimbursements available, have experience handling employee benefits, and understand federal and state laws related to these plans. 

Once an administrator has been chosen, the next step is to decide which types of expenses will be eligible for reimbursement under the plan. Generally, this includes doctor visits, hospital bills, prescriptions medications, medical equipment such as wheelchairs or walkers, dental work and vision care such as exam fees or contact lenses. Other eligible expenses may include hearing aids and orthodontia services. It’s important that employers create a clear set of guidelines so that employees know exactly what expenses are considered eligible for reimbursement under the plan. 

Once eligibility requirements have been established, employers need to decide how much they will reimburse their employees for approved expenses. In some cases businesses may choose to pay 100 percent back depending on how generous their particular benefit package is; however most companies choose either partial or full reimbursements depending upon existing financial resources. Employers should also create rules regarding when claims must be submitted so claims don’t become stale due to time constraints on submitting them. 

Finally, it’s important that businesses communicate their medical expense reimbursement policies clearly with employees so there is no confusion over what qualifies as an eligible expense under the program. Employees should also be given information about who they can contact if they have any questions regarding their coverage or reimbursing their out-of-pocket costs associated with approved expenses.