Medical expense reimbursement plans (also known as MERPs, MRPs, Section 105 plans, or direct reimbursement plans) are arrangements through which employers reimburse employees for uninsured medical expenses that are not paid for by the employer's major medical plan. Under these plans the reimbursements are tax free to employees and tax deductible for employers, provided that they do not discriminate in favor of highly compensated employees. Most MERPs are funded entirely by the employer, but employee contributions are possible. MERPs have been used by employers for years, but after IRS guidance issued in 2002 coined the term "health reimbursement arrangement (HRA)" to describe a certain type of MERP that included carry-over and spend-down features, many employers have turned their MERPs into HRAs.