SECTION 125 PLAN
A Health Benefit That Pays. For Everyone.
Protect your team, reward healthy behavior, and reduce payroll taxes, with the potential to bring down overall cost.
WHAT IT IS
What This Plan Is
A fully insured hospital indemnity plan with proactive health benefits built in. It protects employees in the event of a serious illness or injury, and it encourages consistent engagement with their health.
Employees may receive fixed indemnity payments for covered events such as hospital stays, ER visits, ICU care, and ambulance services.
Premiums are deducted pre-tax under Section 125, which may reduce FICA obligations for both employer and employee.
This plan is designed to enhance your existing benefits, not replace them.
REAL VALUE FOR YOUR TEAM
What Employees Get
✓Virtual primary care and urgent care.
✓Behavioral health support.
✓Comprehensive generic prescription coverage.
✓24/7/365 telemedicine with no copay or deductible.
✓Tools and resources that encourage a healthy lifestyle.
✓Monthly engagement activities. Once completed, a claim is filed automatically and paid straight into their paycheck.
✓Benefits extend to family members.
✓Free access to a tax advice line.
✓Potential increase in take-home pay, which varies by individual.
BUILT FOR ROI
What Employers Get
✓Potential reduction in FICA obligations starting Day 1.
✓Estimated annual savings per enrolled employee, which varies by group.
✓No requirement to replace existing benefits.
✓Workforce health reporting and data insights.
✓Aggregated data to support better renewal negotiations.
✓May help reduce the risk of high-cost claims through early detection.
✓Potential improvement in overall claims utilization over time.
✓Tax savings may be used at employer discretion.
✓A strong attraction and retention tool that demonstrates real investment in employee wellbeing.
CHANGE THE BEHAVIOR. CHANGE THE COST.
Earlier Care Costs Less
People often delay care until problems become serious and expensive. This model encourages consistent engagement, which helps identify issues earlier.
Earlier care → better outcomes → lower long-term costs.
THE NUMBERS DON'T LIE
The Numbers That Matter
$600+Estimated annual savings per employee
2–5%Potential increase in take-home pay
$500+Estimated cost avoided per unnecessary ER visit
Day 1Potential tax savings may begin
24/7365-day access to virtual care
HOW WE IMPLEMENT
How It Works
1Determine eligible employee classes and set up the pre-tax payroll structure.
2Employees enroll through a simple, guided process.
3Employees engage with health tools and complete monthly activities.
4Claims are filed automatically once activities are completed.
5Claim payments are added directly to employee paychecks.
6The employer generates ongoing FICA tax savings and reporting insights.
IMPORTANT INFORMATION
Important Disclosures
This is a fully insured fixed indemnity plan underwritten by an A-rated carrier. It is not a major medical plan, a wellness plan, or a tax savings program.
Participation is voluntary and employees may opt out at any time.
Indemnity claim payments may be taxable depending on individual circumstances and out-of-pocket medical expenses.
No financial outcome or savings is guaranteed. Results vary based on workforce and participation.
Lower-income employees should consider potential impacts on eligibility for state aid programs or tax credits.
Employees are encouraged to consult a qualified tax or financial professional before enrolling.
This content is for informational purposes only and does not constitute tax, legal, or financial advice.
See If This Works for Your Team
We'll show you exactly how this plan saves money, and whether it's worth implementing.
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Benefits Ninja provides insurance and benefits consulting. Everything on this site is general information for educational purposes only. It is not insurance, tax, legal, or medical advice, it is not a quote, and it is not an offer or binder of coverage. CHOICE Arrangement is the name adopted by CMS and the SBA on September 3, 2026 for what federal tax guidance still calls an Individual Coverage Health Reimbursement Arrangement (ICHRA); both terms refer to the same benefit and the renaming did not change the governing rules. Plan availability, eligibility, rates, contribution limits, and savings vary by state, carrier, group size, plan design, and employee census, and are subject to carrier underwriting and applicable law. Any figures, examples, or savings shown are illustrative only and your results will differ. Tax outcomes, including any FICA impact, depend on your specific facts; consult your own tax advisor and legal counsel before acting. Coverage is in force only when issued in writing by the carrier. Insurance offered through licensed agents in states where licensed.