Howard Francis (650) 449-6888 Howard@CPAddc.com
Retention Strategy Saves on Payroll Taxes & Wages
Compliance
This Plan is a Self-Insured Medical Reimbursement Plan (SIMRP) and was purposely created, fully researched, and found compliant with IRC 213(d), 106(a), 105(b), 1.105-11(i) and 104(a) (3) codes, and all applicable IRS memos, ERISA regulations, HIPAA, and the ADA.
Medical Services Are a Key Component
This Plan is always paired with an ACA approved medical plan to make an integrated 105 plan.
Deduction of The Plan Is Pre-Tax Eligible
The deduction of plan cost from an employee's gross wages is addressed by IRC Codes 106 (a). The Office of Chief Counsel Internal Revenue Service Memorandum (Number: 201703013, Dated: 1/20/2017) states:
"The value of coverage by an employer provided wellness program that provides medical care (as defined under §213{d)) is generally excluded from an employee's gross income under §106(a). The pre-taxing of this deduction made possible under a Self-Insured Medical Reimbursement Plan and a Cafeteria Plan (§ 125) creates the reduction of taxable income, generating a savings for the employee and the employer.
Post-Tax Program Reimbursements
Any reimbursements or payments for medical care (as defined under §213(d)) provided by the program is excluded from the employee's gross income under §105(b)."
Also, Code 1.105-11(i) and 104(a)(3). Reimbursement guidelines are spelled out in the SIMRP plan documents provided by the Provider.
Reimbursement Allowances
Allowable pre-taxing and reimbursement amount based on Dept. of Health and Human Services report (July, 2016) and national average cost total for monthly value of benefits. Amounts allowed are also based upon fair market value of benefits provided through the provider Program for preventative services that are 213(d) compliant. All regulations and guidelines of Provider's Self- Insured Medical Reimbursement Plan (SIMRP)are used for benefits and are paired with a Section 125 Cafeteria Plan. SIMRP must be paired with medical insurance for an integrated 105 plan.
Frequently Asked Questions
Is this Health Insurance?
No. This program is a voluntary employee benefit program.
Is this a legal federal program?
Yes. This is a tax qualified Self-Insured Medical Reimbursement Plan with a wellness focus that uses tax advantage provisions under the Internal Revenue Service codes “Section 125 Cafeteria Plan and codes 105-11(SIMRP), 106, and 213(d) plus ACA wellness rules.
Does this program work with a payroll service?
Yes. We work with all the top payroll companies. Our 3rd party administrator provides all the necessary documents to implement the program with your payroll service.
Does it affect my company-sponsored group health insurance?
No. This program does not interact with your group medical plan.
Do I need to change my workers’ comp policy?
No. Your policy will remain the same except the amount used for gross wages in the calculation will be lower; ultimately reducing your premiums.
How much does it cost?
There are no out-of-pocket costs for participating in the federal program.
Who picks the insurance?
The employee selects the policies that want to buy using the non-taxable allowance.