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Preventive Care Benefits Plan: Cut Payroll Taxes Up to $1,186 Per Employee - With No Out-of-Pocket Cost
- Sabih Shafi E.A
- Aug 14
- 7 min read
Every employer with W2 staff pays FICA - 7.65% of payroll, every pay period, with nothing back. A preventive care benefits plan (also called a preventative care management program, or PCMP) is one of the few IRS-recognized structures that turns part of that fixed cost into savings: up to $1,186 per full-time employee per year for the employer, at no out-of-pocket cost to the business, while employees keep their take-home pay and gain real healthcare benefits.
All State Tax Resolution has partnered with IG Business Advisors to bring this program to our business clients - with our own licensed Enrolled Agent review of the plan's tax structure. If your company has 15 or more full-time W2 employees, the numbers below apply to you.
What Is a Preventive Care Benefits Plan?
It is a Section 125 cafeteria plan arrangement combined with a preventive-care program built on IRC §105(b), §106(a), §104(a)(3) and §213(d). Employees elect a substantial pre-tax deduction that funds a package of preventive health services, and a structured reimbursement restores their take-home pay. Because the pre-tax election lowers taxable wages, the employer's share of FICA drops - that is where the payroll tax savings come from.
The plan layers on top of what you already offer. There is no change to your existing group health coverage, no premium increase, and no net cost to the business - the program is funded from the tax structure itself.
How Much Can Employers Save?
Program data from IG Business Advisors shows maximum employer savings of up to $1,186 per full-time W2 employee per year - well above the $650-$675 most competing programs openly advertise. A companion plan for part-time employees adds up to $600 per part-time employee per year.
15 full-time employees - up to $17,790 per year
50 full-time employees - up to $59,300 per year
100 full-time employees - up to $118,600 per year
250 full-time employees - up to $296,500 per year
500 full-time employees - up to $593,000 per year
Employees benefit too: participants typically see $250-$350 per month of personal tax savings redirected into their benefits package while take-home pay stays where it was. Better benefits at zero cost to staff is a retention lever most employers never get to offer.
Calculate Your Estimated Annual Savings
Set your full-time and part-time headcount below and the calculator shows your company's estimated maximum annual savings. When you're ready, one click sends us your numbers and we'll confirm exact figures against your payroll.
If the calculator doesn't load on your device, email us your headcount and we'll run the numbers for you.
How the Plan Works, Step by Step
1. Pre-tax deduction - a fixed Section 125 election lowers each participating employee's taxable wages
2. Employer FICA savings - the 7.65% employer FICA rate now applies to a lower taxable payroll
3. Post-tax reimbursement - a structured reimbursement restores the employee's take-home pay
4. Benefits funded - the employee-side tax savings fund the preventive care services
Implementation is light: census collection takes 3-5 business days and most companies are live within 2-3 weeks, through a four-phase process of discovery, implementation, onboarding and optimization. Your payroll provider stays; the program plugs into your existing payroll run.
What Your Employees Get
Unlimited 24/7/365 virtual urgent care visits
Unlimited virtual primary care visits each year
Unlimited therapy and mental health visits per member
1,000+ generic medications by home delivery, plus urgent medications at 70,000+ retail pharmacies
Personalized weight-health coaching with app integrations
No-cost Quest diagnostic lab testing after 90 days
Minimal Essential Coverage (MEC): $0-copay primary care visits and $0-copay access to 3,500+ medications
Hospital Bill Eraser - averaging 35% reductions on hospital bills nationwide
Guaranteed-issue whole life insurance option up to $150,000
Nothing comes out of your employees' pockets either - their take-home pay is preserved while their benefits get materially better. Happier employees, lower turnover, zero added payroll cost.
Is This IRS-Compliant? How This Plan Differs From the Programs That Get Flagged
Let's name the elephant in the room. The IRS has warned about so-called wellness plans: Chief Counsel Advice 202323006 (May 2023), reinforced by an April 2024 consumer alert, concluded that fixed-indemnity wellness schemes - where employees receive cash payments with no related medical expense - do not deliver the tax savings they advertise. Much of what is being sold in this space today is exactly that. We are a licensed Enrolled Agent firm, and we declined to offer anything in this category until we found a program whose compliance posture we could stand behind. This is that program, and here is how it is different:
It is not a fixed-indemnity arrangement - benefits are real §213(d) preventive services that employees actually receive and use: telehealth, primary care, mental health, labs and pharmacy
Reimbursements are structured under §105(b) and tied to the plan's medical benefits - the specific element the IRS found missing in the schemes it flagged
Plan documents are built to ERISA and ACA requirements on a Section 125 / §106(a) foundation with a substantial, documented pre-tax deduction
The program has been independently reviewed, including by ERISA-focused attorneys at a national law firm and underwriting analysis by a Big Four accounting firm
The category is also maturing fast - states have begun developing dedicated licensing frameworks for these programs. Our own standard is simpler: if we wouldn't defend it in an audit, we don't put our name on it. No program can guarantee savings; your exact figures depend on your census and payroll, which is why every engagement starts with a no-cost analysis of your real numbers.
Who Qualifies
Businesses with roughly 15 or more full-time W2 employees
Full-time = averaging 30+ hours per week and earning about $26,000+ per year
Part-time staff can be covered by the companion plan (up to $600/employee/year in employer savings)
Any industry - the plan works alongside your existing group health coverage
Not sure whether your mix of full-time and part-time staff qualifies? It takes one email with your headcount to find out.
Refer a Business, Get Paid Every Month
Know an owner with 15 or more employees? Refer them. When a business you refer enrolls, All State Tax Resolution pays you $7 per enrolled employee per month for as long as they stay on the plan. Refer a 100-employee company and that is about $700 every month - for one introduction, with no extra work.
Send us your referral - or share this page with them directly. The savings calculator above also has one-click referral and share buttons.
About Our Strategic Partner, IG Business Advisors
The Preventive Care Benefits Plan is delivered in partnership with IG Business Advisors, the program specialists behind the plan's design, implementation and employee onboarding. All State Tax Resolution remains your tax firm of record: we review how the plan interacts with your payroll, entity structure and year-end filings, and we stay accountable for the tax side.
You can review the program itself on the IG Business Advisors Preventive Care Benefits Plan page, then contact us and both teams will work your numbers together.
While We're Looking at Your Payroll: the R&D Tax Credit
If the preventive care plan is worth a conversation, there is a good chance a second one is too. The Research & Development tax credit is one of the most under-claimed incentives in the code, and the name misleads people - you do not need a laboratory or a science degree to qualify.
If your team develops or improves products, software, formulas, manufacturing processes or techniques - and there is real technical uncertainty in the work - those wages may support a credit. It is a dollar-for-dollar reduction of tax liability, not a deduction, and qualified small businesses can apply up to $500,000 per year against their payroll tax liability instead of income tax. That matters if you are pre-profit.
You can also look backward: open tax years can generally be amended, so a company that never claimed the credit may be able to recover cash from prior returns. Between the two programs, the same payroll register that funds your FICA savings may also be sitting on an unclaimed credit.
Ask us to look at both when we run your headcount numbers - it is the same conversation and the same payroll data.
Frequently Asked Questions
Is a preventive care benefits plan legal and IRS-compliant?
The structure is built on IRC §125, §105(b), §106(a) and §213(d) with ERISA/ACA plan documents, and it differs specifically from the fixed-indemnity wellness schemes the IRS flagged in CCA 202323006: benefits here are real preventive services employees actually use, with reimbursements tied to the plan. The program has been independently reviewed, including by ERISA-focused counsel. As with any tax position, results depend on proper implementation - which is why a licensed Enrolled Agent firm oversees it for our clients.
What does the plan cost the employer?
Nothing out of pocket. The plan is funded through the pre-tax payroll structure itself, and the employer's FICA savings are net of program costs.
Will my employees' paychecks go down?
No - the plan is designed so take-home pay is preserved through the reimbursement structure, while employees gain the full benefits package at no cost to them.
What is the minimum company size?
Around 15 full-time W2 employees (averaging 30+ hours per week). There is no practical upper limit - savings scale past 500 employees.
Do part-time employees qualify?
Yes - a companion plan covers part-time staff at up to $600 per employee per year in employer savings.
How long does setup take?
Census collection takes 3-5 business days, and most companies are live within 2-3 weeks.
Does this replace our health insurance?
No. It layers on top of your existing coverage and does not change your group health plan.
Related Reading
Talk to an Enrolled Agent About Your Numbers
This page is general information, not individual tax advice. Savings figures are program maximums provided by IG Business Advisors and vary by company. Email us your headcount for exact numbers, book a free review, or call or text us directly.
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