An executive reimbursement plan is a type of flexible benefit plan. This type of plan supplements the underlying health plan by reimbursing your insured executives and key employees for many of their out-of-pocket medical expenses up to as much as $100,000 per year. Historically, corporations were allowed to discriminately reimburse these executives and key employees on a self-insured basis for out of pocket medical and dental expenses. The corporation deducted the expenses and the executives received the money tax-free. However, after the passage of Code § 105(h), corporations can no longer provide this perk on a discriminatory basis, "unless it is part of an insured program." In other words, the corporation can no longer reimburse executives directly, but can still selectively provide this executive perk as long as the benefits are provided through an insured program. This type of flexible benefit plan gives you an effective tax tool to reward executives and other key employees with your organization who are critical to its success.