[ Glossary ]Reference

A field guide to terms & codes.

Clear definitions of the key terms, tax codes, and program components related to the Preventive Care Benefits Program and SIMRP-based employee benefits.
[ 01 ]Index

Jump to a term.

Twelve definitions across program structure, IRS code, and payroll mechanics.

01

SIMRP

02

FICA

03

Section 125 Cafeteria Plan

04

WIMPER

05

PCBP

06

IRC §105

07

IRC §106

08

IRC §213

09

ACA Participatory Wellness Program

10

IRS Chief Counsel Advisory 202323006

11

Pre-Tax Payroll Deduction

12

Employer FICA Tax Savings

[ 02 ]Definitions

Terms in full.

T.01

SIMRP (Self Insured Medical Reimbursement Program)

A Self Insured Medical Reimbursement Program (SIMRP) is an employer-sponsored benefit plan under IRC §105(b) that reimburses employees for qualified preventive care medical expenses. Unlike traditional health insurance, SIMRPs are self-funded by the employer through pre-tax payroll restructuring and do not require insurance premiums. The Preventive Care Benefits Program uses a SIMRP structure to deliver comprehensive preventive care benefits to W2 employees with no out-of-pocket expenses for employers, generating average FICA tax savings of $1,119 to $1,186 per employee per year.

T.02

FICA (Federal Insurance Contributions Act)

FICA is the federal payroll tax that funds Social Security and Medicare. Employers and employees each pay 7.65% of taxable wages — 6.2% for Social Security (up to the wage base limit) and 1.45% for Medicare. When employees participate in the Preventive Care Benefits Program, the pre-tax SIMRP deduction reduces FICA-taxable payroll, saving employers approximately $93.33 per employee per month ($1,119.96 per year) in FICA taxes.

T.03

Section 125 Cafeteria Plan

A Section 125 cafeteria plan, authorized under IRC §125, allows employees to choose between taxable cash compensation and qualified non-taxable benefits through a salary reduction agreement. The Preventive Care Benefits Program utilizes a Section 125 plan to establish a pre-tax payroll deduction of $1,220 per month that funds the SIMRP. Because the deduction is pre-tax, it reduces the employee's taxable income and both employer and employee FICA obligations.

T.04

WIMPER (Wellness Incentive Medical Plan Employee Reimbursement)

WIMPER is the post-tax reimbursement mechanism used within the Preventive Care Benefits Program. After the $1,220 monthly pre-tax SIMRP deduction is taken, the WIMPER component returns the full $1,220 to the employee as a post-tax reimbursement. This ensures that the employee's net take-home pay remains identical to what it would be without the program, while the pre-tax deduction generates FICA tax savings for the employer.

T.05

PCBP (Preventive Care Benefits Program)

The Preventive Care Benefits Program (PCBP) is a comprehensive employee benefits program that combines a SIMRP under IRC §105(b) with a Section 125 cafeteria plan to provide preventive care benefits to full-time W2 employees. Benefits include over 1,000 preventive care prescriptions, unlimited telemedicine, $150,000 life insurance, $150,000 AD&D coverage, mental health counseling, dental and vision discounts, hospital bill reduction up to 35%, health advocacy, medical bill negotiation, and identity theft protection — all with no out-of-pocket expenses for employers or employees.

T.06

IRC §105(b) — Exclusion of Employer-Provided Health Benefits

Internal Revenue Code Section 105(b) provides that amounts received by an employee through an employer-provided accident and health plan for medical care (as defined in IRC §213(d)) are excluded from the employee's gross income. This is the foundational tax code section that allows the Preventive Care Benefits Program to provide tax-free preventive care benefits to employees.

T.07

IRC §106(a) — Employer-Provided Coverage Under Accident and Health Plans

Internal Revenue Code Section 106(a) states that the gross income of an employee does not include employer-provided coverage under an accident or health plan. This section establishes that employer contributions to the Preventive Care Benefits Program are not taxable income to employees.

T.08

IRC §213(d) — Definition of Medical Care

Internal Revenue Code Section 213(d) defines "medical care" as amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body. The preventive care benefits provided under the PCBP meet this definition, qualifying them for tax-free treatment under IRC §105(b).

T.09

ACA Participatory Wellness Program

Under 42 U.S.C. §300gg-4(j)(3)(C), a participatory wellness program is one that does not require individuals to satisfy a standard related to a health status factor in order to obtain a reward. The Preventive Care Benefits Program is structured as a participatory wellness program, meaning all eligible employees can participate regardless of health status. This classification ensures full ACA compliance.

T.10

IRS Chief Counsel Advisory 202323006

IRS CCA 202323006 is a Chief Counsel Advisory memorandum issued by the Internal Revenue Service addressing the tax treatment of certain self-insured medical reimbursement program (SIMRP) structures. The Preventive Care Benefits Program is designed in full compliance with the guidelines and structural requirements outlined in this advisory, ensuring that the FICA tax savings and benefit delivery mechanisms meet IRS standards.

T.11

Pre-Tax Payroll Deduction

A pre-tax payroll deduction is an amount withheld from an employee's gross pay before income tax and FICA taxes are calculated. In the Preventive Care Benefits Program, a $1,220 monthly pre-tax deduction is taken under the Section 125 cafeteria plan. This reduces the employee's taxable income, which lowers both income tax withholding and FICA contributions for both the employer and employee.

T.12

Employer FICA Tax Savings

Employer FICA tax savings refer to the reduction in an employer's Federal Insurance Contributions Act tax obligation achieved through the Preventive Care Benefits Program. When the $1,220 monthly pre-tax SIMRP deduction reduces an employee's FICA-taxable wages, the employer saves the matching FICA rate of 7.65% on that amount — approximately $93.33 per employee per month, or $1,119.96 per year. For a business with 50 employees, this represents approximately $55,998 in annual tax savings.

[ End ]

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