Business Tax Strategy · ProfitGuard Plus
What is a SIMRP?
A SIMRP is a Self-Insured Medical Reimbursement Plan. It is a written plan, under Section 105 of the tax code and Treasury Regulation 1.105-11, that lets an employer reimburse employees for real medical care without that reimbursement counting as income. Inside ProfitGuard Plus, it is the piece that pays people back.
Quick answer
- SIMRP stands for Self-Insured Medical Reimbursement Plan. It is one component of ProfitGuard Plus, not the whole program.
- Under Section 105(b), money paid back to an employee for medical care as defined in Section 213(d) is not counted as income.
- Treasury Regulation 1.105-11(i) lets the plan take both employer and employee contributions and says how each one is taxed.
- In ProfitGuard Plus the SIMRP is kept separate from the Section 125 cafeteria plan. That separation is what keeps the plan clear of the double dip.
- A SIMRP is a written plan. There are plan documents behind it, and your CPA can read them.
- The SIMRP is always paired with a real ACA medical plan, which makes ProfitGuard Plus an integrated Section 105 plan.
What a SIMRP does
It reimburses. An employee receives preventive care through the program, and the SIMRP pays them back for that care under its written plan document. Because the care is medical care under Section 213(d), the reimbursement is excluded from the employee's income under Section 105(b).
Why it is kept separate from the cafeteria plan
The Section 125 cafeteria plan is where the pre-tax election happens. If a plan tried to send the reimbursement back out through that same cafeteria plan, the reimbursement would be taxable. That is the double dip the IRS memos were written about. Running the reimbursement through a separate SIMRP, under its own plan document, is the structural choice that holds up.
Where it fits in ProfitGuard Plus
ProfitGuard Plus is the whole structure: the Section 125 election, the preventive care program, and the SIMRP reimbursement, paired with your medical plan. The SIMRP is the reimbursement layer. The other three code sections are on the tax code page, and the long version is in the SIMRP deep dive.
Frequently asked questions
What does SIMRP stand for?
Self-Insured Medical Reimbursement Plan. It is a written plan under Section 105 of the tax code and Treasury Regulation 1.105-11.
Is a SIMRP the same as ProfitGuard Plus?
No. ProfitGuard Plus is the whole structure. The SIMRP is one component of it, the reimbursement layer that pays employees back for real medical care.
Why not just reimburse through the cafeteria plan?
Because a reimbursement paid back out through the Section 125 plan is taxable. Keeping the SIMRP separate, under its own plan document, is what keeps the reimbursement tax free.
What can a SIMRP reimburse?
Medical care as Section 213(d) defines it. In ProfitGuard Plus that means telehealth, mental health support, care navigation, and chronic condition support. Gym memberships and gift cards do not qualify.
Does a SIMRP need plan documents?
Yes. It is a written plan. ProfitGuard Plus plan documents are written and reviewed by CPAs and ERISA attorneys, and your CPA can read them.
This is education, not tax or legal advice. Actual savings vary by payroll structure, participation, and state and local tax. Talk to your CPA about your specifics before you decide. ProfitGuard Plus is a marketing name for a structure built on IRS code sections 125, 106(a), 105, and 213(d).
See your ProfitGuard Plus number
Enter your W-2 headcount and see the combined value first. Then we'll run your exact numbers. You can also read the full walkthrough on the ProfitGuard Plus page or call +1 (586) 899-1003.
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