Employer FAQ

The Preventive Care Benefits Program (PCBP) is a Self Insured Medical Reimbursement Program (SIMRP) that provides comprehensive preventive care benefits to full-time W2 employees with $0 out-of-pocket expenses for employers. The program is structured under IRC §105(b), §125, and ACA participatory wellness guidelines, generating average FICA tax savings of $1,119 to $1,186 per employee per year.

The program requires $0 out-of-pocket expenses from employers. There is no employer contribution required. The program is funded through a pre-tax payroll restructuring under IRC §125, which simultaneously generates FICA tax savings for the employer averaging $93.33 per employee per month ($1,119.96 per year).

When employees participate in the program, a $1,220 monthly pre-tax deduction is taken under a Section 125 cafeteria plan. This reduces the employer's FICA-taxable payroll. At the combined FICA rate of 7.65% (6.2% Social Security + 1.45% Medicare), employers save approximately $93.33 per participating employee per month, or $1,119.96 per year.

Yes. The program is structured as a participatory wellness program under 42 U.S.C. §300gg-4(j)(3)(C) and complies with all applicable ACA regulations. It is not a group health plan and does not replace or interfere with existing health insurance coverage. Compliance is further supported by IRS Chief Counsel Advisory 202323006.

No. The Preventive Care Benefits Program is a supplemental preventive care program, not a health insurance plan. It works alongside any existing group health insurance, individual marketplace plans, or even if no health insurance is in place. Employees keep all of their current coverage.

The program is designed for businesses with full-time W2 employees. There is no strict minimum, but the program is most impactful for businesses with 5 or more eligible employees. All full-time employees earning at least $26,000 annually are eligible to participate.

Implementation typically takes 2-3 weeks from initial enrollment to the first payroll cycle with the program active. Our team handles all plan documentation, compliance filings, and employee communication during this period.

No. Employees' net take-home pay remains virtually the same. The program uses a pre-tax payroll restructuring — not a wage reduction. The pre-tax deduction reduces taxable income, which offsets the deduction amount through lower income tax and FICA withholding. Employees receive comprehensive preventive care benefits at no effective cost.

The only payroll change is adding a pre-tax deduction of $1,220 per month ($610 semi-monthly, $564.62 bi-weekly, or $282.31 weekly) under the Section 125 cafeteria plan. We provide all necessary payroll codes and documentation for your payroll provider.

The pre-tax deductions are reported on employees' W-2 forms in accordance with standard Section 125 reporting requirements. We provide guidance on proper W-2 coding. No additional IRS filings are required beyond standard payroll tax reporting.

The program is designed for full-time W2 employees. Part-time employees, 1099 contractors, and seasonal workers are generally not eligible. Full-time is typically defined as 30+ hours per week in alignment with ACA definitions.

When an employee separates from employment, their participation in the program ends with their final payroll. There is no COBRA obligation for this program as it is a preventive care wellness program, not a group health plan.

The program offers flexible terms. The program can be discontinued at any time with appropriate notice. There are no long-term lock-in contracts. Most employers continue the program indefinitely due to the ongoing FICA savings and employee satisfaction.

Unlike an HRA (Health Reimbursement Arrangement) or FSA (Flexible Spending Account), the Preventive Care Benefits Program requires no employer funding. HRAs require employer contributions, and FSAs require employee salary reductions with use-it-or-lose-it rules. The PCBP is a SIMRP under IRC §105(b) that provides defined preventive care benefits through pre-tax payroll restructuring with no out-of-pocket expenses for either party.