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Claims Process (Sole Proprietors)

The process in itself is the same as shown in Claims Process but many self-employed persons question why they are paying the claim twice – once personally, and once from their business account, which they perceive as being their own funds. The answer lies in the separation of the business funds and the personal funds. The business must reimburse the owner as if he/she were an employee. Then the expense is a tax deduction for the business and a non-taxable benefit to the business owner as if he/she were an employee. The medical expense is paid in pre-tax business dollars instead of after-tax personal dollars.

Step 1: Employee

  • Personally pays for their medical, dental and wellness expenses
  • Completes a MediDirect® Claim Form
  • Attaches the original receipts
  • Forwards claim directly to MediDirect®

Step 2: MediDirect® and Employer

  • Upon receipt of the claim, MediDirect® invoices the Employer
    OR
  • The Employer has a Prefunded Account which is debited as claims arise
  • The total claim amount includes the claim expenses to be reimbursed, plus a 10% administration fee plus applicable taxes

Step 3: MediDirect®

  • Issues the reimbursement to the Employee within 5 business days upon receipt of the claim and payment by their Employer. This is a non-taxable benefit for the full amount of their expense claim.
  • Sends the Employer a receipt which is used as a tax deduction

 

The Claims Process for Self Employed Persons or Sole Proprietors:

The process in itself is the same as described above, but many self employed persons question why they are paying the claim twice – once personally, and once from their business account, which they perceive as being their own funds. The answer lies in the separation of the business funds and the personal funds. The business must reimburse the owner as if he/she were an employee. Then the expense is a tax deduction for the business and a non-taxable benefit to the business owner as if he/she were an employee. The medical expense is paid in pre-tax business dollars instead of after-tax personal dollars.