GUIDE

The Employer's Guide to MERP Strategies

A practical overview of how Medical Expense Reimbursement Plans work and what determines whether one is a fit.

A Medical Expense Reimbursement Plan (MERP) is one of several alternative funding and plan design strategies employers use to manage rising benefits costs. This guide covers the basics of how MERPs work and what to consider before pursuing one.

What is a MERP?

A MERP allows an employer to reimburse employees, tax-free, for qualifying medical expenses — often paired with a plan redesign that shifts some first-dollar cost exposure while the employer reimburses a portion of that exposure directly. Done well, this can reduce overall plan cost while maintaining or improving the employee experience.

Why consider it

Compared to simply absorbing another year of premium increases, a MERP strategy gives employers more direct control over how dollars are spent — reimbursing actual utilization rather than paying a flat premium regardless of usage.

What determines fit

MERP strategies aren't universal. Plan design, current funding arrangement, group size, and claims patterns all affect whether this approach makes sense — and, if so, how it should be structured. This is generally not a strategy to implement without a proper analysis of your specific plan.

Common questions employers ask

Does this replace our current plan? No — a MERP typically works alongside a plan redesign, not as a standalone replacement.

Will employees notice a difference? Communication is critical here. Employees need to understand how reimbursement works, or the strategy can create confusion rather than value.

How do we know if this fits our group? That depends on your specific plan design, funding arrangement, and claims experience — exactly what a benefits analysis is designed to evaluate.

Don't overlook employee education

A MERP shifts more responsibility onto employees to understand how reimbursement actually works — which is exactly why education matters more here, not less. Every UBA Health MERP engagement includes custom, company-branded materials, text message campaigns, short explainer videos, and a certified benefits counselor available to walk each employee through exactly how their reimbursement works.