Medical reimbursement plans, also known as expense reimbursed insurance, often get a bad rap for being costly. However, like many industry misconceptions, the reality isn’t that simple. When properly leveraged, these plans offer strategic advantages that far outweigh their perceived costs. Let’s break it down. Understanding Medical Reimbursement Plans When discussing medical reimbursement plans, people […] The post Myth Busters: Are Medical Reimbursement Plans Too Expensive? appeared first on ArmadaCare.
Medical reimbursement plans, also known as expense reimbursed insurance, often get a bad rap for being costly. However, like many industry misconceptions, the reality isn’t that simple. When properly leveraged, these plans offer strategic advantages that far outweigh their perceived costs. Let’s break it down.
Understanding Medical Reimbursement Plans
When discussing medical reimbursement plans, people typically think of one of two things:
- Health Reimbursement Accounts (HRAs, FSAs, HSAs) – These accounts help cover out-of-pocket medical expenses, but they are not insurance. While they provide financial flexibility, they don’t offer robust coverage of an expense reimbursed insurance plan.
- Executive Reimbursement Plans – These are supplemental health insurance plans designed to provide high-level benefits for key employees. Since expense reimbursed insurance qualifies as an excepted benefit, employers can carve out by employee class to provide targeted coverage based on title, tenure, or performance.
Why Executive Medical Reimbursement Plans Are Worth It
Yes, executive medical reimbursement plans tend to have a higher price tag than other supplemental options, such as hospital indemnity or critical illness policies. However, the cost must be weighed against the extensive benefits:
- Near “100% Coverage” – Modern executive reimbursement plans provide broad coverage for everything from routine copays and prescriptions to high-cost treatments like LASIK, fertility services, and advanced diagnostics. ArmadaCare’s executive reimbursement solution offers up to $100K in annual coverage.
- Tax Efficiency* – Unlike traditional group health benefits, fully insured executive reimbursement plans offer dual tax efficiency: premiums are a tax-deductible expense for the business, and reimbursements are non-taxable for enrolled employees.
- Additional Services – Many reimbursement plans come with valuable perks, such as specialty matching, Elective Executive Physicals, and travel emergency services, enhancing the overall benefits experience.
The Hidden Cost of Not Offering Reimbursement Plans
While some employers may hesitate to invest in medical reimbursement plans due to upfront costs, failing to offer competitive benefits can lead to greater long-term expenses—especially in recruitment and retention.
- Employee Retention & Satisfaction – Today’s workforce expects high-quality benefits, and top talent is quick to explore other opportunities if their current employer falls short. Losing key employees due to inadequate benefits can cost far more than investing in a reimbursement plan.
- Recruitment Costs – In a competitive job market, attracting top-tier candidates requires more than just salary. Robust health benefits—including medical reimbursement plans—are a proven differentiator for executive and high-performing employees.
Tap Into Flexibility
Expense reimbursed insurance plans like Ultimate Health® by ArmadaCare can go well beyond ordinary supplemental voluntary plans, which often have disease- or event-driven conditions. With Ultimate Health, coverage is available where and when needed, even as age-and-stage needs shift year after year.
In addition, these innovative expense reimbursed insurance plans are not tied to the typical benefit plan calendar. Ultimate Health can be put in place at the start of any month, so there’s no need to wait until the primary health plan renews. This flexibility can help employers meet evolving employee needs or address key issues as they emerge
The Bottom Line: Are Medical Reimbursement Plans Too Expensive?
No, consider this myth busted. When considering the breadth of coverage, tax efficiency, and long-term employee retention benefits, medical reimbursement plans are a smart investment rather than a prohibitive expense. The modern landscape of expense reimbursed insurance provides scalable solutions for companies of all sizes, making these plans more accessible and impactful than ever.
ArmadaCare’s benchmarking data shows a fourfold increase in retention and reveals that 98% of members consider their plan to be the most important benefit.1 If you’re seeking a proven, high-impact solution, Ultimate Health provides top-tier reimbursement coverage tailored to executive and key employee needs.
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*This is not local, state or federal tax advice as each person and company is unique. It is recommended that you seek the independent counsel of a professional tax adviser.
1ArmadaCare Engagement Survey, 2024
The post Myth Busters: Are Medical Reimbursement Plans Too Expensive? appeared first on ArmadaCare.
