Suncoast Advisors Group is a privately owned company, with headquarters in Pinellas Park, FL. The Suncoast Benefit team brings with them over 100 years of combined experience in operational management of insurance sales, marketing, employee benefits, and individual or group health insurance. Suncoast Advisors Group, by partnering with high quality strategic partners, provides proven industry leading no risk cost reduction programs which will save your company many thousands of dollars by reducing your Payroll tax costs, increasing efficiencies, and effectively working with the current tax laws here in the US. We are experts in helping your company’s bottom line to be more profitable!
For almost 50 years, employers have utilized health and wellness insurance programs through Section 125/Cafeteria plans to reduce payroll taxes and can now free up hundreds of dollars for employees. This program combines those principles with the latest developments in wellness tax benefits to give savings back to companies and increase benefits to their employees. This is accomplished without affecting the employee’s net take-home pay or adding any costs to the company’s bottom-line.
On January 1, 2014, a new tax incentive was created by congress which now provides incentives to both employers and employees that participate in a participatory and compliant wellness program. It is the position of Congress, that education and participation in an approved compliant wellness program will lead to a reduction in the nation’s overall healthcare costs benefitting both the employer and the employee.
“Participatory” Wellness Programs are programs that either do not provide a reward to employees or do not include any conditions for obtaining a reward that are based on an individual satisfying a standard that is related to a health. In addition, participatory wellness programs must be made available to everyone in the company that have similar situated individuals, regardless of their health status. Participatory Wellness Programs are not Health Insurance plans that require the individual to satisfy a standard related to a health factor to obtain a reward.
It is estimated that over 90% of today’s employers have not been informed of these tax breaks as it has only been implemented by a select few companies with the task of educating the business owners at large.
There are 2 types of Wellness plans available: Our current Participatory “Compliant” Wellness Program does include services that qualify as “medical” care and is considered a “health plan.” The Essential program is the perfect fit for business owners looking to provide a benefits plan for their employees while satisfying penalties imposed on them and their employees by the ACA mandates. The standard Participatory Wellness Plan is not considered Health Insurance and does not satisfy the ACA mandate.
The Single Pre-Tax Wellness Contribution is $700 per month, per qualified employee and the Married Pre-Tax Wellness Contribution is $1,100 per month, per qualified employee. These amounts are deducted through a Section 125 pre tax and then put back into the employee’s pay post tax keeping the employee’s pay the same.
Suncoast Advisors Group has now partnered with industry leaders in participatory compliant wellness healthcare programs, to save employers an average of $525 up to $700 per year per employee on their Payroll/FICA taxes. This reduction takes effect on the first payroll run after plan implementation and is NOT an end of year tax deduction. In addition, the plan provides additional benefits to employees with no reduction in the employee’s take home pay.
- Employees must average 30 hours per week or average 130 hours per month, consistently, to qualify for this program.
- Employees that are receiving a subsidy through a State or Federal exchange are not eligible because it would mean double-dipping.
- Owners of the company, including their spouse also do not qualify for this program unless their share is 5% or less.
- Tipped employees without a salary base, do not qualify for this program.
- Employees who are 1099 independent contractors do not qualify for this program.
Any pre-tax reduction in employee’s adjusted gross income will lower the amount of payments to Social Security. We recommend purchasing whole life insurance that builds cash value which can be withdrawn down the road tax-free to offset the reduction in Social Security. The Flex Credits can be used that in almost all cases will provide greater retirement income and a higher level of security for the employee and for their family.
No! The Wellness Flex Credit Tax Savings money cannot be withdrawn and can only be used to purchase supplemental insurance coverage through payroll deduction. As long as the employee doesn’t exceed their Wellness Flex Credit Allowance, their take-home pay will remain the same as it was before.
Under IRS Section 125 and 213-D, employees are able to receive certain Flex Credits, based on participation in the compliant wellness activities. This benefit amount will not exceed 50% of member’s health care cost which includes deductibles, co-insurance, premiums, screenings and other health related prevention methods.
This type of program using Section 125 Pre-Tax Deductions with companies using a Self-Funded Indemnity Plan have been around for years. These programs provide “Flex credits”, based on certain participation guidelines (checking in with their wellness coach periodically) in the wellness activities, those employees may use to purchase ancillary products outside of this plan and through the company’s cafeteria plan.
The employee’s income subject to payroll taxes is reduced by participation in the wellness plan through a Section 125 or Cafeteria Plan which also reduces the matching FICA tax obligations of the employer. Participating employees then purchase a post tax, self-funded, limited benefit indemnity medical plan. You save money and there is no reduction in the employee’s take-home pay. In addition your employees are provided with additional insurance benefits which can include: accident, critical illness, cancer, hospital indemnity, and cash value life insurance at no net cost to the employee.
Our counselor specifically addressed this issue with the chief counsel of the IRS on the use of flex credits for ancillary products and it’s a common practice among employers. Claim payments that come from policies bought with post tax dollars have never been taxable.
Yes, this regulation hasn’t changed since the inception of the ACA. However, the ways in which an employee earns flex credits have changed and we adhere to the aforementioned IRS Final Rule regarding the nature and process of the use of flex credits. Claim payments can be funded from a group health/welfare benefit plan.