A 2023 IRS Chief Counsel Memorandum addressing fixed-indemnity wellness plans funded through Section 125 cafeteria plans, concluding that indemnity payments made on a tax-free basis under those structures should be treated as taxable wages.
This memo is the most important document for understanding why indemnity-structured preventative care plans carry tax risk and SIMERP-structured plans do not. Every benefits decision-maker considering one of these programs should read it (or read a competent summary).
Definitions only do so much. A live walkthrough of how all of this connects in your business takes about half an hour.