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 tax 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:
- 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.