Six federal sources support the PCBP structure: four IRC sections, one ACA provision, and one IRS Chief Counsel Advisory.
IRC §105(b)
Provides that amounts received by an employee through employer-provided accident and health plans for medical care are excluded from gross income.
Relevance: The PCBP's preventive care benefits qualify as employer-provided medical care excludable from employee income under this section.
IRC §106(a)
States that gross income of an employee does not include employer-provided coverage under an accident or health plan.
Relevance: Establishes that employer contributions to the PCBP are not taxable income to employees.
IRC §125
Allows employees to choose between taxable and non-taxable benefits (including accident and health plan coverage) through salary reduction agreements.
Relevance: The PCBP utilizes a Section 125 cafeteria plan structure for the pre-tax payroll deduction that funds the program.
IRC §213(d)
Defines medical care to include amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease.
Relevance: The preventive care benefits provided under the PCBP meet the definition of medical care under this section.
42 U.S.C. §300gg-4(j)(3)(C)
Defines participatory wellness programs that do not require individuals to satisfy a standard related to a health status factor and establishes compliance requirements.
Relevance: The PCBP is structured as a participatory wellness program under this provision, ensuring ACA compliance.
IRS CCA 202323006
IRS Chief Counsel Advisory memorandum addressing the tax treatment of certain self-insured medical reimbursement program structures.
Relevance: The program is structured in full compliance with the guidelines and requirements outlined in this advisory.
Clarifying what the PCBP does not replace, fund, or trigger — to set expectations cleanly with payroll, benefits, and legal teams.
Does not replace or interfere with existing health coverage.
Requires no employer funding or employee salary sacrifice.
Program benefits end with employment — no COBRA continuation.
Built on established IRC sections and affirmed by IRS guidance.
No. The program is built on established provisions of the Internal Revenue Code — IRC §105(b), §125, and §213(d) — that have been in place for decades. IRS Chief Counsel Advice Memorandum 202323006 specifically addresses compliant SIMRP structures.
These IRC sections have been part of the tax code since the 1970s and 1980s. The program is designed and monitored for ongoing compliance. If regulations change, the program structure adapts accordingly.
No. The Preventive Care Benefits Program is a preventive care wellness program, not a group health plan. It does not trigger COBRA obligations. When employees separate, benefits end with their final payroll.
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