What Is a Section 105 SIMRP and How Does It Work?

Section 105 SIMRPself-insured medical reimbursementIRC 105tax-free reimbursement

The Self-Insured Medical Reimbursement Plan (SIMRP) under IRC §105(b) is one of three IRS provisions that power the PCMP. It allows employers to reimburse employees for qualifying medical expenses tax-free.

Overview

This article provides a comprehensive overview of what is a section 105 simrp and how does it work?. The Preventive Care Management Program (PCMP) is an IRS-compliant benefit structure that reduces employer payroll tax liability while providing employees with a full suite of health benefits at zero net cost. Built on IRC §§ 125, 105(b), and 106(a), the PCMP has been available to employers since 1978 and is explicitly authorized by IRS Chief Counsel Advice Memorandum 201703013.

Key Takeaways

The PCMP generates $636 per W2 employee per year in net FICA savings for employers. Employees receive a comprehensive benefit suite including dental, vision, telemedicine, mental health services, and more — with no reduction in take-home pay. The program is available in all 50 states, integrates with all major payroll platforms, and includes full audit-ready documentation.

Getting Started

To learn more about how the PCMP can benefit your business, submit our online intake form. Our team will prepare a custom savings proposal for your specific workforce within 48 hours. There is no obligation and the process takes less than 2 minutes.