The 90-second version
The EHP plan is a preventative care membership structured as a Self-Insured Medical Expense Reimbursement Plan (SIMERP). Every W-2 employee working 30+ hours and already enrolled in your group health plan can join.
Once enrolled, the employee makes a pre-tax election under Section 125 of the IRC to fund their participation in the SIMERP - typically around $700/month. That election lowers the employee's FICA-taxable wage base, which in turn lowers the employer's 7.65% FICA tax liability by approximately $53 per employee per month.
The employee receives a post-tax reimbursement from the SIMERP under Section 105(b) for qualified medical expenses (Section 213(d)), which nets to a take-home pay increase of $100–$150/month for the typical employee. They also get access to no-cost virtual primary care, urgent care, mental health, a prescription discount benefit, and weight health for themselves and their family.
The structure (and why it's compliant)
The plan rests on four sections of the Internal Revenue Code, all of which have been on the books for decades:
- Section 125 defines the employee's right to make a pre-tax election for qualified benefits. Learn more →
- Section 105(b) defines the tax-free treatment of employer-funded reimbursements of medical expenses. Learn more →
- Section 213(d) defines which medical expenses qualify for tax-free reimbursement. Learn more →
- SIMERP is the structural label for a plan that uses all three together in a self-insured form. Learn more →
- 1Employee elects a pre-tax SIMERP contribution under Section 125.
- 2Pre-tax election reduces FICA-taxable wages on both employer and employee sides.
- 3Employer captures 7.65% FICA savings on the reduced wage base.
- 4SIMERP reimburses the employee under Section 105(b) for qualified 213(d) medical expenses.
- 5Employee receives no-cost access to primary care, urgent care, mental health, Rx, and weight health.
The math, on a sample paystub
Here is what changes on the paystub of an employee earning $4,500/month gross, electing a $700/month pre-tax SIMERP contribution. Numbers are illustrative; actual figures depend on filing status, state, and benefit elections.
| Line item | Before | After | Change |
|---|---|---|---|
| Gross pay (monthly) | $4,500 | $4,500 | |
| SIMERP pre-tax election | - | −$700 | −$700 |
| FICA-taxable wages | $4,500 | $3,800 | −$700 |
| Federal income tax withholding (est.) | −$540 | −$456 | +$84 |
| FICA withholding (employee, 7.65%) | −$344 | −$291 | +$53 |
| Section 105(b) post-tax reimbursement | - | +$575 | +$575 |
| Estimated take-home pay | $3,616 | $3,728 | +$112 |
Eligibility
Three rules cover ~95% of employees:
- Must be a W-2 employee (not 1099, not partner).
- Must work 30+ hours per week.
- Must already be enrolled in a qualifying group health plan.
The family rider extends every benefit to the employee's spouse and up to five dependents - at no additional cost. Dependents do not need to be on the employee's group health plan to access the SIMERP-side benefits.
See which industries fit the eligibility profile especially well →
Where the money comes from
The plan has two economic flows. Both come from existing tax statutes - not from a vendor subsidy, not from a venture-backed runway, not from a marketing budget.
Employee Section 125 pre-tax election → reduced FICA-taxable wage base → 7.65% employer FICA savings. Net of admin fees, ~$13/employee/month positive cash to the employer.
Pre-tax election → lower income tax & FICA withholding → Section 105(b) post-tax reimbursement returns the dollars net of avoided tax → ~$100–$150/month take-home increase.
What employees actually do
Minimum participation requirements are modest: enroll, complete a short health questionnaire, and use the program (a telehealth visit or app interaction) at least once per quarter. Most employees use the program far more - primary care utilization runs 3-5× higher than typical group plan PCP utilization.
The day-one experience is downloading the app, creating an account, and adding family members. From there, booking a visit is two taps.
What HR actually does
Almost nothing on an ongoing basis. EHP and Revive run the enrollment communications, the app, the telehealth network, and the member services. Payroll integration is configured once at setup - a one-time mapping of the pre-tax contribution and the post-tax reimbursement to the right paystub lines.
Annual maintenance is approximately one open-enrollment communication, plus the standard payroll feed.
What it costs
$0 out of pocket to the employer or the employee, on a properly structured implementation. The employer admin fee - currently $40/employee/month - is billed in arrears and paid out of the FICA savings, leaving a net positive monthly cash contribution to the employer.
Compliance
The plan is governed by:
- IRS: Sections 125, 105(b), 213(d).
- ACA: Sits alongside (does not replace) minimum essential coverage.
- ERISA: Formal plan document and Summary Plan Description for employees.
- HIPAA: Employer sees only aggregate, de-identified utilization data.
A separate category of preventative care products - fixed-indemnity plans run through Section 125 - has faced IRS scrutiny since 2023. The EHP SIMERP is not one of those products. See the comparison →
Common questions
W-2 employees working 30+ hours per week who are currently enrolled in a qualifying group health insurance plan. Part-time, seasonal, and 1099 contractors are not eligible.
Yes. The employee's spouse and up to five dependents are covered on every benefit - primary care, urgent care, mental health, prescription discount, and weight health - at no additional cost.
They are not eligible. The program is designed to supplement an existing primary plan, not to replace it. Employers who don't offer group health coverage are not a fit for this program.
No. Partners receiving guaranteed payments / K-1 income are not W-2 employees and therefore not eligible. Same for 1099 contractors.
Each enrolled employee makes a Section 125 pre-tax election (typically around $700/month) to fund the SIMERP. That election reduces the FICA-taxable wage base. The employer pays 7.65% FICA on a lower wage base, which works out to approximately $53/employee/month in employer FICA savings on a typical census.