Fully Compliant Peace of Mind.
Payroll Tax Shield is built on the Affordable Care Act as well as several other tax codes that provide employers and employees the opportunity to take advantage of savings.
In Summary, Payroll Tax Shield was designed to be fully compliant with all relevant regulations.
The CPA Journal, "20 Questions about Establishing a Health & Wellness Program in the Workplace"
Technical Answers to How Payroll Tax Shield Works
Self Insured Medical Reimbursement Plan
(SIMRP)
IRS 213(d), 106(a), 105(b), 1.105-11(i) and 104(a)(3) codes, and all applicable IRS memos, ERISA regulations, HIPAA, and the ADA.
Key Component
The Payroll Tax Shield plan ALWAYS incorporates medical services as a key Component.
ACA Approved
Our plan is always paired with an ACA approved medical plan to make an integrated 105 plan.
Taxability
Deduction of the plan is pre-tax eligible.
​
The deduction of plan cost from an employee's gross wages is addressed by IRS Codes 106(a). The Office of Chief Counsel Internal Revenue Service Memorandum (Number: 201703013, Dated 1/20/2017) states: "The value of coverage by an employer provided wellness program that provides medical care (as defined under §213(d)) is generally excluded from an employee's gross under §106(a). The pre-taxing of this deduction made possible under a SIMRP and a Cafeteria plan (§125) creates the reduction of taxable income, generating a savings for the employee and the employer.
Regarding Post Tax
Reimbursements
Any reimbursements or payments for medical care (as defined under §213(d)) provided by the program is excluded from the employee's gross income under 105(b). Also, Code 1.105-11(i) and 104(a)(3). Reimbursement guidelines are spelled out in the SIMRP plan documents we provide.
Reimbursement Allowances
Allowable pre-taxing and reimbursement amount based on Dept. of Health and Human Services report (July, 2016) and national average cost total for monthly value of benefits. Amounts allowed are also based upon fair market value of benefits provided through the wellness program for preventative services that are 213(d) compliant. All regulations and guidelines of our program are used for the wellness benefits and are paired with a Section 125 Cafeteria Plan. The SIMRP must be paired with medical insurance for an integrated 105 plan.
Code Summary:
Wellness - IRS §106(a) - ERISA, IRS §213(d) - ADA, IRS §105(b), HIPAA, IRS §125, IRS §105.11, & IRS §104(a)(3)
Medical - IRS §213(d)ACA
Pre-Tax - IRS §213(d), IRS §106(a), & IRS §125
Post-Tax - IRS §213(d), IRS §105(b), 1.105.11(i), 104(a)(3), 1.105.11(k)(1), & 1.105.11(k)(2)