The ten questions
- 1. Is the plan structured as a SIMERP or as a Section 125 indemnity wellness plan?
- 2. Can I review the plan document and SPD before signing?
- 3. How do you reconcile your tax treatment with IRS Chief Counsel Memorandum 202323006?
- 4. What is the per-employee admin fee, and is it billed in arrears or upfront?
- 5. Who operates the telehealth and pharmacy network - the vendor directly or a downstream subcontractor?
- 6. What are the actual member-experience numbers (average wait for a primary care visit, app rating, member service response time)?
- 7. What states is the network licensed in, and are there service gaps for remote employees?
- 8. What is the family rider structure, and are dependents charged additional premium?
- 9. What HR burden does this create at setup and ongoing?
- 10. Will you offer an indemnification or hold-harmless provision if the IRS challenges the structure?
How to read the answers
Crisp, written answers to each of these is a strong signal. Verbal hand-waving on any of the structural questions (1, 3, 10) is a strong negative signal. Vague answers on the member-experience questions (5, 6, 8) usually indicate a white-labeled network that the vendor does not directly operate.
What to do with the answers
Score each vendor 0-1 per question. Eight or higher is worth a follow-up call. Below six is probably not worth your time. Vendors who score perfectly on everything except question 10 (indemnification) are still worth talking to - hold-harmless is the highest-bar ask and many otherwise-legitimate vendors will not offer it.