What is Reimbursement ? | Meaning & Definition| Akrivia HCM

A reimbursement is a form of compensation paid to an organization by an employee, customer, or other party for out-of-pocket expenses incurred on that person’s behalf. It is a repayment for money already spent. Reimbursement of business expenses often includes travel-related costs such as flight and hotel bookings, meal consumption, and daily commute. It can use in various contexts, such as for business expenses, insurance claims, and healthcare expenses. In some cases, employers may offer part of a health benefit plan, such as a Health Reimbursement Arrangement (HRA). In order to be eligible for reimbursement, employees must properly and timely substantiate their expenses.


Types of Reimbursements

Insurance Reimbursement

Insurance reimbursement is a form of payment from an insurance company to a policyholder for medical expenses or services incurred. This payment can be a direct payment or a reimbursement for expenses already paid out of pocket. Insurance typically reimburses the cost of medical treatments, such as surgeries, prescriptions, and hospital stays. In some cases, insurance companies may also reimburse non-medical expenses, such as travel or lost wages. The insurance industry often uses reimbursement to help policyholders manage out-of-pocket medical expenses and reduce their financial burden.

Tax Reimbursement:

Tax reimbursement is a form of compensation from an employer to an employee for taxes paid on income received from the employer. This type of reimbursement is usually in the form of a direct payment to the employee or a reimbursement of taxes withheld from the employee’s paycheck. Employers typically calculate reimbursement based on the employee’s salary or wages and the applicable tax rate. Employers use tax reimbursement to help employees offset the cost of taxes they pay on income they receive from their employer.

Legal Reimbursement: 

Legal reimbursement generally refers to the process of receiving compensation or reimbursement for legal expenses incurred by an individual or organization. This can include expenses such as attorney fees, court costs, and other legal fees. In some cases, legal reimbursement may be covered by insurance policies or by government programs, such as legal aid. In other cases, a legal refund may award as part of a settlement or judgment in a legal case.

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