Healthcare Premium Reimbursement

Healthcare Premium Reimbursement (HCPR) is available to an employee if they pay for an individually owned health insurance policy. With HCPR, employees can have individually owned healthcare premiums deducted from their paycheck on a pre-tax basis. HCPR is designed as an alternative benefit to group coverage.

The employer does not pay Medicare, Social Security, or unemployment insurance taxes on the amounts that employees choose to have withheld from their paychecks on a pre-tax basis.

If only a few employees choose to take advantage of the ability to pay health insurance premiums with pre-tax dollars, the employer can still realize a net financial gain. HCPR allows small business owners to help employees pay for individually owned health care by utilizing pre-tax dollars.

Participating employees benefit from the ability to pay for an individual or family plan (not employer-sponsored) benefit premiums with pre-tax dollars through salary reduction, which in turn saves them Federal, State and FICA taxes.

Employees can select any health insurance carrier and select the plan that best fits their needs, as long as they are not eligible to receive group health coverage from their employer.

Depending on their family income, the amount of money that individuals can save by paying for health insurance pre-tax is about 25 to 50% of their total insurance premium.

Continue to HCPR: Eligibility