Preventive Care Benefits Plan Implementation Checklist

PREVENTIVE CARE BENEFITS PLAN

Credit and Refund

12/1/20252 min read

Identify which employees qualify: typically full-time W‑2 employees (not contractors or freelancers).
Confirm that your business has sufficient payroll volume to make the program financially worthwhile.
Document baseline FICA taxes for current payroll to measure savings after program implementation.

Work with a vendor or advisor that structures the program to meet IRS and ACA rules (e.g., Sections 105, 125, 106, 213(d)).
Ensure that the program integrates pre-tax benefit deductions, wellness, or supplemental benefits without reducing take-home pay.
Review the program’s service offerings: telehealth, urgent care, prescription coverage, mental health support, preventive services, wellness perks.

Confirm that all benefit contributions are pre-tax eligible under IRS rules.
Ensure non-discrimination compliance: benefits must not favor highly compensated employees over rank-and-file staff.
Verify that wellness or preventive benefits meet ACA requirements for coverage and minimum essential services if applicable.
Document plan rules, contributions, employee eligibility, and administrative processes.

Calculate estimated employer FICA tax reduction based on restructured wages/benefits.
Consider how savings scale with headcount and employee participation.
Compare savings against any administrative or vendor fees.

Coordinate with existing pre-tax benefits (HSA, FSA, 401(k), health insurance) to avoid overlap or double-counting.
Ensure payroll systems correctly process pre-tax deductions and reflect FICA adjustments.
Communicate clearly to HR/Payroll teams about new contribution codes, benefits categories, and reporting requirements.

Prepare a clear employee announcement explaining:
- Benefits they receive (wellness, telehealth, etc.)
- Effect on take-home pay (ideally neutral or improved)
- How participation works
Provide educational materials or webinars to maximize engagement.
Track employee adoption rates to optimize program utilization.

Update payroll system to reflect pre-tax contributions for all eligible employees.
Ensure FICA taxable wages are accurately reduced for contributions.
Set up periodic audits to verify proper tax withholding and benefit application.

Keep detailed records of employee participation, contributions, and benefit usage.
Perform regular internal audits to ensure FICA tax reductions match program documentation.
Retain documentation for IRS or state audits (generally 3–7 years).

Recalculate FICA savings based on updated payroll and benefit participation.
Review new IRS guidance or legislative changes that could affect eligibility or compliance.
Adjust the program for changing workforce composition or new benefit offerings.

Combine with other payroll-tax reduction strategies:
- R&D payroll tax credits for eligible small businesses
- Work Opportunity Tax Credit for new hires from targeted groups
- Retirement plan contributions (pre-tax employee deferrals)
Consider wellness incentives tied to engagement (e.g., preventive screenings, wellness challenges) while staying within IRS limits.

Properly implemented FICA‑Savings programs can reduce employer FICA taxes $500–1,200 per employee annually, enhance benefits, and improve retention.
Compliance with IRS Sections 105, 125, 106, 213(d) is critical — structured, documented, and auditable plans avoid penalties.
Integration with existing payroll, benefits, and wellness programs maximizes both tax savings and employee value.
Regular monitoring and annual updates ensure long-term compliance and continued efficiency.

Disclosure: Credit and Refund Specialists is a paid affiliate partner of IronGate Business Advisors

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Preventive Care Benefits Plan

Credit and Refund Specialists is an affiliate of IronGate Business Advisors.