What you keep paying when you don't adopt this.
For a 150-employee business with an average $4,500/month wage and a standard group health plan, choosing not to adopt the EHP SIMERP costs approximately:
- ~$66,000–$72,000/year in unrecaptured employer FICA tax on the wages that could have been routed through the Section 125 pre-tax election.
- ~$220,000/year in workforce healthcare expense that your employees pay out of pocket (copays, urgent care, prescriptions, mental health, family coverage) and that doesn't get redirected.
- ~10–20% of group plan claim activity on routine preventative care that could have moved to the SIMERP-side and lowered next year's renewal experience.
Where the money goes instead
The FICA tax that doesn't get recaptured goes to the federal Social Security and Medicare trust funds. That's not inherently bad - but it's a public-good destination rather than a business or workforce investment. Money you could be paying out as retention bonuses, putting toward facility maintenance, or returning to your employees as healthcare access instead leaves the business permanently.
Meanwhile your employees continue paying for routine healthcare out of pocket. The average US family spent $4,800 in 2024 on out-of-pocket healthcare costs not covered by their primary insurance - a figure that increased ~7% year-over-year. The EHP program is one of the few mechanisms to redirect that spend.
What the FICA savings actually fund
On a 150-employee business, $66,000–$72,000/year of recaptured FICA savings is enough to fund any of the following:
- A $475/employee/year retention bonus pool across the entire workforce
- A 1.0 FTE additional HR or operations hire
- A doubling of the company match on the 401(k) up to ~3% of payroll
- An equipment or facilities reinvestment that previously would have been deferred
Different businesses pick different uses. The point is that the dollars exist and they're durable: the savings repeat every year that the program runs.
Run your specific numbers
The opportunity cost depends on your specific workforce. Use the calculator to see what your business is leaving on the table.
What this looks like for a 100-employee business.
When doing nothing is actually the right call
A handful of situations where adopting this program isn't the right answer:
- Your business is mostly part-time or 1099, so the eligible population is too small to make the math work.
- You're mid-acquisition, mid-bankruptcy, or otherwise in a period where adding any new HR program creates more friction than savings.
- Your employee base is largely uninsured (no qualifying group health plan), so the eligibility test fails for most of your workforce. This program is a supplement, not a replacement.
Outside those cases: the cost of doing nothing compounds year after year. Most employers who delay regret the timing - not because the program is going away, but because the savings they passed on in the prior year are permanently gone.