SIMRP or SIMERP? Why You Will See Both

SIMRP and SIMERP name the same instrument: a self-insured medical reimbursement plan under Section 105(b) of the Internal Revenue Code. SIMRP abbreviates the phrase the IRS actually prints. SIMERP inserts “expense” because §105(b) reimburses medical expenses. Neither spelling is a typo, and the IRS itself publishes neither acronym.

If you arrived here because one advisor wrote SIMRP and another wrote SIMERP and you wanted to know which one to trust, the answer is both. Here is where each spelling comes from, and how to confirm it in primary sources rather than taking a vendor’s word for it.

Where SIMRP Comes From

SIMRP is an acronym for self-insured medical reimbursement plan — four words, four letters. That exact phrase is the term of art in federal tax material.

Treasury Regulation §1.105-11 is titled “Self-insured medical reimbursement plan.” It is the regulation that defines the instrument, sets out the written-plan requirement, and imposes the nondiscrimination rules that apply to highly compensated individuals.

IRS Publication 15 (Circular E), the Employer’s Tax Guide, uses the same phrase in the section on wages and other compensation:

Generally, medical care reimbursements paid for an employee under an employer’s self-insured medical reimbursement plan aren’t wages and aren’t subject to social security, Medicare, and FUTA taxes, or federal income tax withholding. See Pub. 15-B for a rule regarding inclusion of certain reimbursements in the gross income of highly compensated individuals.

— IRS Publication 15 (Circular E), 2026 edition, Section 5, page 20.

That sentence is the payroll-tax treatment in one line, written by the IRS, in the IRS’s own vocabulary. Note the words it does not contain: expense. Abbreviate the phrase the IRS actually printed and you get SIMRP.

Where the Extra E Comes From

SIMERP is an acronym for self-insured medical expense reimbursement plan. The added word is not decoration. It comes from the statute the regulation implements.

IRC §105(b) is the exclusion itself, and it is written in terms of expenses: it excludes from gross income amounts paid to reimburse the taxpayer for expenses incurred for medical care, with medical care defined at IRC §213(d). The operative noun in the statute is expenses. So when the benefits industry needed a name a business owner could follow, it borrowed the statute’s noun and said the whole thing out loud: a plan that reimburses medical expenses.

There is also a plainer reason. “Self-insured medical reimbursement plan” is ambiguous when read quickly — it sounds like the plan reimburses medicine, or reimburses medical care directly, the way an insurer pays a hospital. “Self-insured medical expense reimbursement plan” removes the ambiguity: the plan reimburses the expense.

Which Spelling Should You Use?

It depends entirely on who you are talking to, and it is worth being deliberate about it.

Use SIMRP, or the full phrase, when you are searching or citing. The IRS publishes neither acronym — it writes the phrase out in full. Search federal tax material for SIMERP and you will find vendors writing about the IRS; search for “self-insured medical reimbursement plan” and you will find the IRS. When a CPA asks for a source, give them the phrase, not the acronym.

Use SIMERP when you are talking to people. It is the spelling the market settled on, it is unambiguous when spoken, and it is how nearly every provider, broker and administrator in the category writes it.

Never treat the other spelling as an error. An advisor who writes SIMRP is not being sloppy. They are quoting the regulation. If anything, they are being more precise than the industry is.

The Other Spellings You Will See

Beyond the two legitimate acronyms, this term gets mangled constantly — SMIRP, SIRP, SINERP, SEMRP, SIMEP, SEMP, and “sim erp” as two words all show up in real searches. It is an awkward acronym. We did not invent it, and we would not have chosen it.

If you have seen any of those, you were looking for this: a self-insured medical expense reimbursement plan, run under IRC §105(b), funded through a §125 cafeteria plan, reimbursing medical care as defined at IRC §213(d).

What the Plan Actually Is

Under either spelling, the instrument is the same, and it rests on tax law that has been in place since 1954.

• Self-insured means the employer’s plan pays the reimbursement itself. There is no insurance carrier standing between the plan and the participant, and the plan is not an insurance product.
• Medical expense means what IRC §213(d) says it means: amounts paid for the diagnosis, cure, mitigation, treatment or prevention of disease, or for the purpose of affecting any structure or function of the body. General wellness spending does not qualify.
• Reimbursement plan means it is a written plan, adopted in advance, that pays participants back for those expenses under stated rules. Treasury Regulation §1.105-11 requires the writing.

The funding usually runs through IRC §125, the cafeteria plan section that has powered pre-tax insurance deductions and health FSAs since 1978. When an employee makes a pre-tax salary reduction election to fund a qualified benefit under a §125 plan, that amount is treated as an employer contribution to the accident and health plan under Proposed Treasury Regulation §1.125-1(b). That is not a novel reading. It is the mechanism your existing health insurance deduction already uses.

The Test That Actually Governs

The line between a compliant plan and a scheme is not the spelling. It is Treasury Regulation §1.105-2, and the standard it sets is usually called the “irrespective” test: reimbursements are excludable under §105(b) unless the employee would receive the payment irrespective of whether or not the employee incurs expenses for medical care.

The same regulation addresses how precisely the amount has to be proven:

If the amounts are paid to the taxpayer solely to reimburse him for expenses which he incurred for the prescribed medical care, section 105(b) is applicable even though such amounts are paid without proof of the amount of the actual expenses incurred by the taxpayer, but section 105(b) is not applicable to the extent that such amounts exceed the amount of the actual expenses for such medical care.

— Treasury Regulation §1.105-2.

Two things are true in that sentence, and both matter. The exclusion does not itself require an itemized receipt for every dollar. And the exclusion is measured against the actual expenses for the medical care. Note that this is the §105 rule only: a plan funded through a §125 cafeteria plan, as these generally are, separately has to substantiate each claim through an independent third party before paying it. A plan that pays cash whether or not care happened fails. A plan that reimburses documented medical care does not.

This is the distinction that most “is this legal” commentary misses, and it is the reason IRS guidance aimed at fixed-indemnity cash-back arrangements — CCA 202323006 is the one most often cited — does not describe a service-based medical reimbursement plan. That analysis is covered in full in Is SIMERP Legal? The Definitive Guide to SIMERPs.

How to Verify This Yourself

You should not take a vendor’s word for any of this, including ours. Every source above is public, free, and takes about ten minutes to read.

• IRC §105 — the exclusion. Amounts received under accident and health plans.
• IRC §106 — employer-provided coverage is excluded from employee gross income.
• IRC §125 — cafeteria plans, and the pre-tax salary reduction election.
• IRC §213(d) — the definition of medical care that §105(b) points to.
• Treasury Regulation §1.105-2 — the “irrespective” test and the measurement rule quoted above.
• Treasury Regulation §1.105-11 — the self-insured medical reimbursement plan definition, written-plan requirement, and nondiscrimination rules.
• IRS Publication 15 (Circular E) — Section 5, the payroll-tax treatment quoted above.
• IRS Publication 502 — the working list of what counts as a medical expense. See IRS Publication 502: What’s Actually Reimbursable.

Hand that list to your CPA. It is the whole framework, and it is the same list we give to every attorney who asks.

Your Next Step

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