How a Section 105 Plan Provides a Competitive Edge


In today’s competitive climate, the ability to react to what is happening with governmental laws, rules and regulations  is crucial to helping companies succeed and become even  more profitable. The implementation of the new ACA  (Affordable Care Act) law has put an additional strain and cost  burden on employers and employees alike. In order to address  this problem, we at the are uniquely positioned to help  companies implement a proprietary Section 105 Strategytax overlay strategy under Section 105 of the IRS Code that is Circular 230, ERISA  and HIPAA compliant. This Section 105 Plan is implemented  without any net cost to the company or itIt is designed  to provide the following benefits:

For the employee:

  • Creates an employee self-funded Welfare Benefit Account (Dept. of Labor nomenclature) which reimburses back to the employee 75% of eligible non-reimbursed medical expenses from the employee’s EOB (Explanation of Benefits).
  • Because of the tax favorable and proprietary nature of the program, employees typically will see an approximate 5% pay increase.

For the employer:Section 105 Strategy

  • Creates approximately $400 in FICA savings per employee per year.
  • Allows a company of 100+ employees to choose a group insurance plan with a higher deductible and MOOP (Maximum Out of Pocket) because of the 75% reimbursement to the employee. This, on average, can save the company approximately $50-70/mo per employee in group premium costs even if the company is self insured.  If the company has less than 50 FTE (Full Time Equivalent) employees, group health insurance is not required by law, and a company can save up to $200-300/mo or more per employee if employees participate in an ACA plan.

Again, all of this is accomplished without any net cost from the employer or the employee.


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