North Carolina school districts weigh tax-savings benefit strategy

A North Carolina benefits firm says a self-insured medical reimbursement plan could help school districts trim payroll-tax costs while improving employee healthcare access. The pitch lands as districts like Pender County Schools face multimillion-dollar budget gaps and staffing cuts.

Why it matters: - North Carolina school districts are under pressure from rising personnel costs, staffing shortages and budget gaps. - SIMRP Health & Wellness™ says a tax-advantaged benefit structure could reduce employer payroll costs while expanding healthcare access for school employees. - For districts facing cuts to positions, substitute pay, professional development and support services, recurring savings could help preserve classroom resources.

What happened: - Pender County Schools said it faces a $2.7 million local budget shortfall for the 2026–27 school year. - The district said it needs more funding to maintain current staffing and essential services, not to launch new initiatives. - Pender County Schools said about 86% of its operational budget goes to staffing. - The district linked rising costs to retirement contributions, health insurance, FICA/Social Security, Medicare and other personnel expenses. - Identified reductions include 21 positions, a 25% cut in substitute funding, elimination of professional-development funding and reductions in instructional support, Exceptional Children services and beginning-teacher support. - SIMRP Health & Wellness™ is promoting Self-Insured Medical Reimbursement Plans, or SIMRPs, to school systems and other employers. - The company says a properly structured SIMRP works alongside existing health coverage and does not replace district health insurance.

The details: - SIMRP Health & Wellness™ says employers can reduce certain payroll-tax obligations while participating employees receive added health and wellness benefits. - The company estimates about $590 in annual employer-side payroll-tax savings per participating employee after plan costs. - The savings estimate scales to about $590,000 for 1,000 participating employees, $1.475 million for 2,500, $2.95 million for 5,000 and $5.9 million for 10,000. - The company says those savings can recur annually as long as employees remain in the plan and the plan stays properly structured and administered. - An article on Self-Insured Medical Reimbursement Plans appeared in School Business Now, the publication of Association of School Business Officials International, or ASBO International. - The company says the publication’s editorial review shows the concept has become relevant to the school-business community, but the appearance should not be read as an endorsement of any SIMRP provider or implementation. - SIMRP economics can also help make Direct Primary Care, or DPC, more accessible and affordable for employees, the company says. - DPC is described as a membership-based model intended to improve access to routine and preventive primary care and strengthen the relationship between patients and primary care providers. - The company says the employer savings can help offset the cost of providing that added access to care. - SIMRP Health & Wellness™ says participants may see an estimated 3% to 5% increase in take-home pay, often about $140 to $150 per month, depending on individual circumstances and plan structure. - The company says its scholarship initiative directs $4 per participating employee per month to student scholarships. - At 5,000 participants, the scholarship funding would total $240,000 annually, according to the company. - SIMRP Health & Wellness™ is based in North Carolina and says public-school education is a central focus of its outreach. - The company says its message to superintendents, CFOs, school boards and county leaders is to evaluate every legitimate option before cutting positions, programs or classroom resources. - For 5,000 participating employees, the company says annual employer savings would be nearly $3 million. - The company says finding more resources for public education does not always require a new tax, another grant or another eliminated position.

Between the lines: - The pitch is less about a new health plan than about redirecting existing payroll spending. - The ASBO publication mention gives the idea more visibility in school finance circles, even without constituting an endorsement. - The strategy’s appeal is strongest where districts are trying to balance workforce retention with budget restraint.

What's next: - School leaders considering SIMRPs would need to evaluate plan structure, employee participation and compliance issues before acting. - The company says employers should consult tax, legal and benefits professionals when reviewing the strategy. - North Carolina districts facing 2026–27 budget decisions may continue looking for savings that do not require layoffs or cuts to student services. - SIMRP Health & Wellness™ says it will keep educating employers and public-sector organizations about the model.

The bottom line: - The proposal frames payroll-tax savings as a tool school districts can use to protect staff and programs while expanding employee benefits.