School Business Officials & SIMRPs

What School Business Officials Should Know About Self-Insured Medical Reimbursement Plans

(As featured on School Business Now)

School business officials who have a foundational understanding of self-insured medical reimbursement plans can ask informed questions and responsibly evaluate future proposals. Here are the basics.

School business officials routinely evaluate new ideas intended to improve district operations, strengthen employee benefits, or create financial efficiencies. While some concepts are familiar, others represent approaches that many education leaders have never encountered.

One employee benefit strategy that is increasingly appearing in conversations across both the public and private sectors is the self-insured medical reimbursement plan (SIMRP).

Although SIMRPs have existed for several years, many school business officials are unfamiliar with them. As districts continue balancing workforce challenges, rising healthcare costs, and budget constraints, understanding how these plans work — and the questions school business officials should ask when evaluating one — has become increasingly important.

The Benefits of SIMRPs

A SIMRP is an employer-sponsored employee benefit arrangement that reimburses qualified medical expenses while providing the employee with access to wellness-related services. Unlike traditional health insurance, a SIMRP is not intended to replace a district's existing medical plan. Instead, it operates alongside employer-sponsored health coverage.

Most SIMRPs are structured using long-established provisions of the Internal Revenue Code, including Sections 105, 106, and 125, together with the definition of qualified medical expenses contained in Section 213(d). These provisions have served as the legal framework for employer-sponsored medical reimbursement arrangements for decades.

When properly designed and administered, a SIMRP may allow qualifying employee benefit contributions and reimbursements to receive favorable tax treatment under existing federal law. Depending on the specific plan design, participating employees may also receive access to wellness resources such as telehealth, mental health support, preventive care, prescription services, health coaching, and other health-related services.

School districts are taking a closer look at SIMRPs because these plans address several challenges simultaneously. Employees continue to experience financial pressure from rising living expenses and healthcare costs, while districts are working to recruit and retain qualified staff within limited budgets. Rather than replacing salaries or health insurance, a SIMRP is designed to enhance the overall value of an employee's compensation package through benefit design and tax-efficient reimbursement structures.

Taking a Closer Look

Like any employee benefit strategy, however, a SIMRP should be evaluated carefully. School business officials should understand the legal framework supporting the plan, review projected financial assumptions, determine who is responsible for administration, and seek independent legal and tax review before implementation. Questions about employee communication, payroll integration, compliance responsibilities, and ongoing administration are equally important.

One of the greatest strengths of a thoughtful evaluation process is that it allows district leaders to separate the concept itself from the organization presenting it. Regardless of who introduces a SIMRP, school business officials should expect clear documentation, transparent financial assumptions, qualified professional oversight, and straightforward answers to difficult questions.

Employee benefit strategies continue to evolve, and school districts will likely encounter new approaches in the years ahead. Whether a district ultimately determines that a self-insured medical reimbursement plan is appropriate depends on its unique circumstances, goals, legal review, and financial analysis.

Understanding how these plans work equips school business officials to ask informed questions, evaluate proposals responsibly, and make decisions that support both their employees and their district.

This article originally appeared on the School Business Now website in July 2026 and is reprinted with permission of the Association of School Business Officials International. You can read the article directly from 'School Business Now' HERE

About the Author

Jake Parvu is an employee benefits educator and public-sector benefits consultant specializing in IRS code-compliant employee benefit strategies based in north Carolina. He works with school districts and other public & private sector employers to help leadership teams understand code compliant employee benefits, preventive wellness, and enrollment communication through educational presentations and resources.

Email: jake@simrphealth.com