How Pretax Benefits & FICA Tax Savings Work — Thrive Benefits Group
Section 125 SIMRP Mechanics

How Pretax Benefits & FICA Tax Savings Work

Add a Section 125 plan beside your existing major medical plan. Cut employer FICA by about $50 per participant per month with $0 new budget and zero broker changes, with take-home pay modeled to hold steady.

  • 100% Complementary: Sits alongside your current fully insured or self-insured plan without changing carriers.
  • Instant Cash Flow: FICA tax relief begins on cycle one. Fees are paid from the tax savings the plan creates.
  • $0 Copay Access: Employees receive 24/7 telemedicine, mental healthcare, and generic Rx coverage.

4 Simple Steps to Restructure Payroll & Save FICA

Keep your major medical plan and broker intact while unlocking tax relief sitting inside existing payroll.

  1. Employees elect coverage to participate and gain access to your new benefit suite.

  2. Employees make a pretax Section 125 election that funds the plan. That lowers taxable wages, which lowers FICA for both the employer and the employee.

  3. Routine care stays off the major medical plan. $0 services handle everyday care before it reaches your medical plan.

  4. Participating employees are reimbursed for substantiated §213(d) medical expenses.

A Section 125 plan paired with a Self-Insured Medical Reimbursement Plan (SIMRP).

How the benefit structure works

Everyday $0-Copay Healthcare Included for Your Staff

$0 copay for telehealth, mental health and advocacy services, with no claims against your major medical plan.

24/7 Telemedicine

Dedicated physicians · At-home labs · Primary care · Integrated urgent care · Chronic condition management · Specialist coordination

Mental Health Suite

Behavioral Health · Psychiatry · Therapy On-Demand Counseling · Medication management · Primary care coordination

Rx Coverage

$0 copay on a broad list of generics · Covers 95% of top 200 maintenance medications · 70,000+ pharmacy locations

Health Advocacy

Bill Negotiation · Care Navigation · Physician Search · Coverage Review · Rx Assistance

  1. Dedicated physicians · At-home labs · Primary care · Integrated urgent care · Chronic condition management · Specialist coordination

  2. Behavioral Health · Psychiatry · Therapy On-Demand Counseling · Medication management · Primary care coordination

  3. $0 copay on a broad list of generics · Covers 95% of top 200 maintenance medications · 70,000+ pharmacy locations

  4. Bill Negotiation · Care Navigation · Physician Search · Coverage Review · Rx Assistance

Accident Expense

Covers ER visits, follow-ups, physical therapy, and more after an accident.

Critical Illness

A lump-sum paid to you if you are diagnosed with cancer, a heart attack, stroke, or other covered illness.

Short-Term Disability

Replaces lost income when you cannot work due to injury or illness.

Hospital Indemnity

Cash paid directly to you when you are admitted to a hospital.

Term Life Insurance

Coverage through age 70 for your beneficiaries. Funded through the plan's savings.

Whole Life Insurance

Permanent coverage that builds cash value and never expires.

  1. Covers ER visits, follow-ups, physical therapy, and more after an accident.

  2. A lump-sum paid to you if you are diagnosed with cancer, a heart attack, stroke, or other covered illness.

  3. Replaces lost income when you cannot work due to injury or illness.

  4. Cash paid directly to you when you are admitted to a hospital.

  5. Coverage through age 70 for your beneficiaries.

    Funded through the plan's savings.

  6. Permanent coverage that builds cash value and never expires.

Why Employers, CFOs & HR Directors Choose SIMRP

  1. Fees are paid from the tax savings the plan creates, so there's no new budget line, and the benefits package still improves.

  2. It integrates with your existing medical plan and payroll systems. No change to how you already operate.

  3. A $1 raise costs you about $1.08 after employer FICA. This improves take-home value without adding payroll cost. A $1 raise costs you about $1.08 after employer FICA. This improves take-home value without adding payroll cost.

Employers and teams benefiting from the structure

Built for Legal, Payroll & Broker Compliance

  1. Common problems arise with these programs without proper documentation. Problematic set ups rely on generic, single plan documentation which capitalize on tax ambiguity.

    To prevent tax ambiguity and satisfy ERISA governance requirements, Thrive Benefits Group supports the arrangement through three distinct plan documents.

    Read Legal Compliance Guide →

  2. Cuts taxable wages subject to 7.65% employer FICA tax. Works with Paylocity, ADP, Paychex, Gusto, Paycor, QuickBooks, and most other major payroll systems. Codes for three line items (pretax deduction, reimbursement, admin fee) are set up at kickoff.

    View FICA Mechanics & Payroll Setup Guide →

  3. Works alongside your current carrier and broker. No Broker-of-Record (BOR) change, so current plans and commissions stay intact.

    Read Broker Coexistence & Layering Guide →

  4. Delivers about $50 per participant per month in net employer FICA savings, after fees. Every participant's paycheck is modeled before enrollment and verified in a mock payroll, so net pay is designed to hold steady or rise.

    View Savings & Impact Guide →

Benefits compliance and payroll operations

Frequently Asked Questions About Implementation

No. It sits alongside your existing coverage.
No new budget. Fees are paid from the tax savings the plan creates.
It's designed not to. Every paycheck is modeled first and checked in a mock payroll.
About 4 weeks from first call to first payroll.