We are a qualified Section 125 plan which is established as a self-funded employer-sponsored program, entirely funded by employees via pre-tax payroll deductions. These deductions correspond to the maximum claims for the policy year. A third-party administrator (TPA) manages the funds, holding them in a custodial account and disbursing payments for incurred claims as outlined in the plan document and schedule of benefits.A claim is defined as any request for payment submitted by providers, facilities, pharmacies, or employees. Employee claims occur when a relevant CPT code is triggered along with a corresponding explanation of benefits (EOB). These claims encompass preventive examinations, biometric screenings, health risk assessments, and fulfillment of chronic medications. Notably, claims made to employees are exempt from taxation and are not classified as ordinary income.The premium charged to employees is calculated actuarially to cover the claim risk while maintaining a desired medical loss ratio (MLR). Any surplus remaining in the claim account at the end of the plan year and runout period is considered a plan asset for the employer.

A Section 125 Cafeteria Plan is an employer-sponsored plan that allows employees to pay for certain qualified medical expenses – such as health insurance premiums – on a pre-tax basis. It is called a cafeteria plan because, like walking through a cafeteria and selecting various dishes to eat, employees can choose the types of healthcare options they want, such as medical, dental, vision, and other benefits, and decline the ones they don’t.

There is NO out-of-pocket cost because the program is funded by the tax savings generated! 

No, it's not. We operate as an additional self-funded overlay program, complementing your existing traditional medical insurance plans.

No, they won't. Employees who choose to enroll can continue using their current providers and receiving the same level of medical care offered by their traditional medical insurance. While we offer additional options for improved care and cost savings, employees are not required to utilize these options unless recommended by their physician.

Each pay period, a pre-tax deduction is taken from every employee's paycheck. With the adjusted gross income reduced due to this pre-tax deduction, taxes are calculated accordingly, resulting in a decreased tax burden for employees. Additionally, participation in a monthly healthcare activity triggers a CPT code and explanation of benefits, leading to a post-tax benefit added to their paycheck. This combination ultimately increases the employee's take-home pay.

Our team will schedule an initial meeting and presentation where we gather a few details about your business. No personal information will be required for the initial census. This information is used to determine the number of employees that qualify for the program, which plan each employee qualifies for as well as each employee’s net per pay period impact. We also determine the overall tax savings for your company. If it makes sense for your company, then our enrollment team will help you move forward to the next steps.