The SIMERP Plan
A comprehensive guide to the Self-Insured Medical Expense Reimbursement Plan and how it can transform your employee benefits strategy.
What Is a SIMERP Plan and How Does It Reduce Your Payroll Taxes?
FICA — the Federal Insurance Contributions Act tax — costs your business 7.65% of every qualifying employee’s gross wages. For a company with 50 employees at $50,000 average salary, that is $191,250 in employer FICA taxes per year. The IRS does not require you to pay that amount on every dollar of compensation. It only requires it on wages — not on certain pre-tax benefit reimbursements.
A SIMERP plan works by restructuring a portion of each participating employee’s compensation into a qualifying Section 125 benefit. The IRS excludes these benefits from FICA calculation. The result: your taxable payroll shrinks. Your FICA liability shrinks with it. The employee’s take-home pay stays the same or improves. No one loses ground. Your business keeps the difference.
The reduction runs up to $638.98 per employee, per year, depending on wage levels and benefit participation. For a business with 40 employees, that is a potential tax reduction of more than $25,000 annually — every year the plan is active.
Key Facts
Tax Savings
Up to $638.98 per employee annually in FICA tax
100% Compliant
Fully authorized under IRS guidelines since 2013
Zero Cost to Employees
Enhanced benefits at no out-of-pocket expense
Who is SIMERP For?
SIMERP is designed for forward-thinking employers who want to optimize their benefits plans while reducing costs.
Problems SIMERP Solves
Discover how SIMERP addresses the most common challenges employers face with benefits and payroll taxes.
High FICA Tax Burden
Reduce employer FICA expenses by converting taxable wages into qualified benefits
Rising Benefits Costs
Provide additional benefits to employees without increasing your budget
Employee Retention Challenges
Offer meaningful benefits that demonstrate your commitment to employee welfare
Complex Compliance Requirements
We handle all IRS compliance, ensuring your plan meets all regulatory requirements
High Workman’s Comp
Reduce your Workman’s Comp by 30%
Plan Structure & Phases
Our structured implementation process ensures a smooth transition and maximum value for your organization.
Phase 1: Discovery & Analysis
We analyze your current benefits structure, payroll data, and employee demographics to calculate your potential savings.
Phase 2: Plan Design
Our experts design a customized SIMERP implementation tailored to your company's unique needs and goals.
Phase 3: Implementation
We handle all the technical setup, documentation, and integration with your existing payroll systems.
Phase 4: Employee Enrollment
We provide clear communication materials and support to ensure smooth employee enrollment and understanding.
Phase 5: Ongoing Support
Our team provides continuous compliance monitoring, reporting, and support throughout the plan lifecycle.
Ready to Get Started with SIMERP?
Contact our team for a free consultation and discover how much your business could save.