Articles and glossary, in one place.
Long-form reading for the strategic questions, and a 30-term glossary for the vocabulary you'll run into along the way. Both built for HR directors, CFOs, and business owners thinking through the SIMERP-based preventative care category.
Long-form reading.
Most employers think their 7.65% FICA tax is fixed. It isn't. Section 125 pre-tax elections reduce both the wage base on the employee's side and the matching employer FICA liability - and a properly structured SIMERP can recapture $40–$60 per employee per month, every month.
SIMERPs and HRAs both reimburse employees for qualified medical expenses. From a tax-treatment standpoint they live in the same Section 105 neighborhood. From an employer standpoint they do different jobs.
In 2023 the IRS Chief Counsel published a memorandum that should have ended the indemnity-style preventative care plan market. It didn't - those products are still being sold. Here's what the memo actually said and what employers need to look for before signing.
Section 125 has been on the books since 1978. The mechanics don't change much from year to year, but the categories of qualifying elections do - and the audit posture of the IRS on certain structures has shifted notably since 2023.
If your renewal arrived with a 15-20% increase this year, you are not an outlier. The drivers are structural and they are not going away on their own. The question is which levers you actually control.
Preventative care plans look broadly similar from the outside. The differences that actually matter are buried in the plan document. Here is the short list of questions that separates a product worth your time from one that is not.
The headline figure is not a marketing line. CDC and BLS data put roughly 70% of working-age US adults at elevated risk for one or more preventable chronic conditions. The good news for employers: a small set of levers moves the number measurably.
GLP-1 medications are the most significant cost variable in employer health benefits since the introduction of biologics. They are also one of the highest-impact preventative interventions available. Both can be true at once.
Most vendor evaluations get bogged down in the wrong questions. Here are ten that actually separate the products worth your time from the ones you should walk away from. Vendors who answer all ten cleanly are rare and worth a real conversation.
ERC and SIMERP-based preventative care incentives are commonly confused because both reduce an employer's federal tax burden. They are different mechanisms with different windows, different documentation, and different audit profiles.
School districts that cannot raise a levy and cannot reallocate general fund dollars have a third option for retention spend: payroll-tax savings that sit outside both. The mechanism is durable and underused.
Self-funded employers see effects from claim reduction that fully-insured employers do not. The math compounds in ways that are easy to miss in a year-one analysis but become dominant by year three.
Plain-English definitions.
The terms you'll encounter across the rest of the site - SIMERP, the relevant IRC sections, the alphabet soup of benefits compliance, and the clinical terms tied to the program's benefits.
An IRS-recognized plan structure that reimburses employees for qualified medical expenses pre-tax under Section 105(b), funded by a pre-tax employee contribution under Section 125.
The section of the Internal Revenue Code that lets employees pay for qualified benefits with pre-tax dollars, reducing both income tax and payroll (FICA) tax.
The section of the IRC that allows employer-funded reimbursements of qualified medical expenses to be excluded from the employee's gross income.
The section of the IRC that defines what counts as a 'qualified medical expense' for purposes of pre-tax deductions and tax-free reimbursements.
Federal Insurance Contributions Act payroll tax. 7.65% paid by the employer and 7.65% paid by the employee on most wages, funding Social Security and Medicare.
The Employee Retirement Income Security Act of 1974 - the federal law governing employer-sponsored benefit plans, including health, retirement, and welfare plans.
The Patient Protection and Affordable Care Act of 2010, which set federal minimums for employer health coverage, including the employer mandate and minimum essential coverage standards.
The Health Insurance Portability and Accountability Act of 1996, which governs the privacy and security of protected health information (PHI).
A benefit structure that pays the employee a fixed dollar amount when a specified event occurs (e.g., a doctor visit), regardless of actual incurred cost.
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.
Routine medical care intended to prevent illness or detect it early, including annual physicals, screenings, vaccinations, and chronic disease management.
An employer-sponsored program designed to encourage healthy behaviors, manage chronic conditions, or reduce healthcare costs - generally regulated under HIPAA wellness rules and (when financial incentives are involved) Section 125.
A payroll deduction that reduces the employee's gross taxable wages before income tax and FICA are calculated, lowering both the employee's and employer's tax liability on that amount.
A payment made to the employee after taxes are calculated, typically tax-free if it reimburses a qualified medical expense under Section 105(b) of the IRC.
A formal employer-sponsored benefit plan, established under Section 125 of the IRC, that lets employees choose between cash compensation and qualified pre-tax benefits.
A tax-advantaged personal savings account for medical expenses, available only to employees enrolled in a qualifying high-deductible health plan (HDHP).
A pre-tax employer-sponsored account that lets employees set aside money for qualified medical or dependent-care expenses incurred during the plan year.
An employer-funded reimbursement account that pays for employees' qualifying medical expenses, with no employee contribution and no FICA-wage-base reduction.
An employer-sponsored health plan in which the employer assumes financial risk for medical claims directly, typically with stop-loss insurance to cap catastrophic exposure.
An employer-sponsored health plan in which the employer pays a fixed monthly premium to an insurance carrier, which assumes all financial risk for claims.
Health insurance coverage provided by an employer to its employees as a group, typically with the employer paying a portion of the premium.
Insurance purchased by self-funded employers to cap their exposure to catastrophic individual claims (specific stop-loss) or aggregate claim spend (aggregate stop-loss).
A redacted spreadsheet of an employer's workforce - typically headcount, wage band, age band, dependents, and benefit-enrollment status - used to generate an accurate benefits proposal.
Per Employee Per Month / Per Enrolled Participant Per Month - the standard pricing unit for employee benefit programs.
The ACA requirement that employers with 50+ full-time-equivalent employees offer affordable, minimum-value health coverage to substantially all full-time employees or face penalties.
The ACA standard for health coverage that satisfies the individual coverage requirement and the employer-mandate offering requirement.
The federal law requiring most employer-sponsored group health plans to offer continued coverage to employees and dependents after qualifying events like termination of employment.
Glucagon-like peptide-1 receptor agonists - a class of medications (semaglutide, tirzepatide) originally developed for type 2 diabetes and increasingly prescribed for weight management.
A pharmacy that prepares personalized medications - typically by combining, mixing, or altering ingredients - for an individual patient based on a physician's prescription.
The delivery of clinical healthcare services - primary care, urgent care, mental health, prescription management - via remote video, audio, or asynchronous messaging.
Talk to a human.
Articles answer general questions. A 30-minute call answers your specific ones with your specific census in mind.