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Small Business Employee Benefits and HR Blog

Hamilton County, Ohio Instates MERP for Employees

Hamilton County’s Medical Expense Reimbursement Plan (MERP) aims to keep health benefits for all eligible employees while dramatically cutting costs for the county, which is in deep financial trouble.

hamilton county merpHamilton County’s Medical Expense Reimbursement Plan (MERP) aims to keep health benefits for all eligible employees while dramatically cutting costs for the county, which is in deep financial trouble.

Hamilton County, which employs about 4,000, is doing everything it can to prevent layoffs and save important county programs. The MERP Hamilton County is implementing is a bit different from a traditional MERP. Under a traditional MERP, also known as a Health Reimbursement Arrangement (HRA), a business reimburses an employee 100% tax-free for out-of-pocket medical expenses incurred by employees or their dependents. Reimbursement is typically for premiums from an individual health insurance policy, as well as other eligible expenses.

The Hamilton County MERP's Unique Twist

But the Hamilton County MERP has a unique twist. The plan reimburses medical expenses incurred under “alternate coverage”, which is defined as:

“group medical insurance coverage (other than the coverage provided by Hamilton County) available to an Employee such as through the Employee’s spouse or another employer of the Employee, or (ii) group coverage available to the Employee from any other source including but not limited to eligible retiree benefit programs (other than OPERS or Medicare).  Alternate coverage cannot be a plan with an HSA.”

In other words, they are requiring employees to get coverage from their spouse’s employer, or another employer, if possible. If that is not possible, they will remain on the county’s plan. Like all MERPs and HRAs, the plan was customized to the needs of the company creating it.

What the MERP Will Cover

We’re sure the county provided a comprehensive plan document, but here is a summary of what they’ll be covering:

1. Premiums / payroll contributions: Employees are able to be reimbursed for the amount he pays for the Alternate Coverage that exceeds the current Coverage First 2500 payroll contributions, up to: 

  • Single: $150/month maximum
  • Double: $200/month maximum
  • Family: $400/month maximum

2.   Health care expenses: Employees are eligible for reimbursement for the following items, with no established maximums:

  • Deductibles, co-pays and co-insurance paid under the Alternate Coverage if those expenses would have been covered under the Hamilton County plan.
  • Amounts with respect to Health Care Expenses that are excluded from coverage under the terms of such Alternate Coverage, if those expenses would have been covered by the Hamilton County plan.

At the time of this article being published, sign-ups were still being counted, so the number of workers taking part is still unknown. The county projects the new plan could save up to $3 million in 2013. 

 

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