You pay a 7.65% FICA match on every payroll dollar. A compliant Section 125 preventative care plan lets you reduce that match by roughly $640 per employee per year, at zero net cost, while your team gets better benefits.
FICA is the combined Social Security and Medicare tax. Employers match it dollar for dollar at 7.65% of taxable wages. A FICA tax savings program is, in plain terms, a properly structured Section 125 cafeteria plan paired with a self-insured medical expense reimbursement program (SIMERP) and a preventative care benefit. Qualified pre-tax contributions lower the taxable wage base, so both the employer match and the employee share of FICA go down.
The math, simply: for every dollar of qualified pre-tax wellness contribution, you stop paying the 7.65% employer FICA match on that dollar. Across a workforce, that lands at roughly $640 in employer savings per participating employee per year.
Savings scale directly with headcount. A few examples at the typical figure:
On top of FICA, many employers also see up to 30% savings on workers’ compensation premiums (available in most states) and potential savings on a self-insured health plan.
The program carries a per-employee administration fee, but it is designed so the FICA savings exceed that fee. The result is net-cost-neutral: the program pays for itself, and the surplus funds a richer benefits package for your team. Because we prepare a custom proposal from your census, you see the exact numbers before committing.
No. The plan is structured so employees keep their take-home pay, and many see a slight increase, while gaining free virtual primary and urgent care, 1,000+ prescriptions, mental health support, weight health and fitness benefits at zero out-of-pocket cost.
This is the right question to ask. The IRS has cautioned employers about wellness arrangements that lack genuine medical substance under IRC §213(d). This program is built around IRC §213(d), §106(a), §105(b), §125, Reg. 1.105-11 and §104(a)(3), ERISA, HIPAA and the ADA, and is always paired with real medical care and an ACA-approved plan. We provide plan documents for your CPA or counsel to review. See the Section 125 & SIMERP structure for detail. This page is general information, not tax or legal advice.
Start with a free discovery call. We confirm fit, run your census through our in-house CPA team, and return a per-employee savings proposal, usually within 24 hours.
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