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2023 Medical Reimbursement Plan

For the 2023 Medical Reimbursement Plan, the key elements remain similar to those of 2022, with the primary focus on providing small businesses with various strategies to cover their employees' medical expenses tax-efficiently. These include health reimbursement arrangements (HRAs), Section 125 Plans, and IRC Section 105 Plans. The choice of plan depends on specific business needs and employee profiles, such as company size, age of employees, and the nature of their medical expenses.

  1. Health Reimbursement Arrangements (HRAs): There are three types of HRAs – QSEHRA, ICHRA, and GCHRA, each catering to different business models and sizes. They are flexible and can be tailored to suit the needs of both employers and employees.

  2. IRC Section 125 Plan (Cafeteria Plan): This allows employees to allocate pre-tax income for benefits like health insurance, vision, dental plans, FSAs, and life insurance. It’s beneficial for both employers and employees in terms of tax savings and flexibility.

  3. IRC Section 105 Plan: This is particularly suited for smaller businesses and single-member LLCs. It allows for tax-free reimbursements of medical and insurance expenses and is ideal if the business has at least one employee over 25 years of age and pays reasonable compensation.


  • Reduction in taxable income for both employers and employees.

  • Lower self-employment tax.

  • Valuable benefits for employees, enhancing job satisfaction and retention.


  • The need for diligent record-keeping and compliance with regulatory requirements.

  • Potential requirement for consulting with insurance brokers or financial advisors for plan setup and management.


  • An active medical reimbursement plan must be in place.

  • For certain plans, the business must meet specific size criteria (e.g., fewer than 50 employees for some HRAs).

Conclusion for 2023:

The Medical Reimbursement Plan continues to be a vital tool for small businesses in 2023. It not only provides a means to support employees' health needs but also offers tax advantages for the business. Selecting the right plan requires careful consideration of the business's and employees' specific circumstances. By staying informed and compliant, businesses can maximize the benefits of these plans.

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