Short answer: Section 125 has been part of the Internal Revenue Code for decades. But not every wellness plan built around it is structured the same way, and some designs have drawn regulatory scrutiny. Here is what you should look at before deciding whether a plan is legitimate.
If you searched this, you have likely already seen the cautionary material.
The American Staffing Association published a piece titled "Section 125 Plans Offering Wellness Benefits Warrant Caution." There are similar articles from benefits consultants and law firms.
We would rather you read them than not. A plan that only looks good when you avoid the criticism is not worth putting in front of your caregivers.
The concern is not with Section 125 itself. Section 125 cafeteria plans have been part of the Internal Revenue Code since 1978 and have been used by employers for decades.
The concern is with specific plan designs that were marketed aggressively in recent years. The recurring objections:
Some of the criticism has focused on arrangements where the promised tax savings were not accompanied by meaningful benefits for employees.
Certain arrangements involving fixed indemnity policies and reimbursement structures have drawn regulatory scrutiny over their tax treatment.
Quoted before looking at a single payroll record.
Those concerns are worth taking seriously when evaluating any Section 125 wellness plan.
The Unify Wellness Plan uses a different structure, and that distinction matters.
Employees receive access to virtual primary care, urgent care and behavioral health at no cost, no-cost generic medications, and discounted labs, imaging, dental and vision. Participation includes completing a health risk assessment and a qualifying wellness activity each month.
The Unify Wellness Plan does not use the fixed indemnity and reimbursement structure described in the regulatory concerns above.
It sits alongside whatever coverage you already offer. You keep your broker and your existing policies.
Every proposal is an estimate built from your actual payroll records, and it says so on the document.
We are marketers, not tax advisors, so we do not ask anyone to take our word for it. The plan documentation includes:
The plan is structured under IRS Sections 105, 106, 125 and 213(d) and has been reviewed for ERISA and ACA compliance. The full documentation breakdown is here.
Both letters are available before you sign anything. Ask and we will send them.
Have your own CPA read it.
We encourage this on every call. If your accountant raises a question we cannot answer, we will put you directly on the phone with UnifyWell's compliance people. If you want the mechanics first, here is where the money actually comes from.
An offer that cannot survive your accountant's review is not one you should accept, from us or anyone else.
The plan is structured under IRS Sections 105, 106, 125 and 213(d) and has been reviewed for ERISA and ACA compliance. The full documentation breakdown is here.
When evaluating a plan, look at what employees actually receive, how the plan is structured, what independent legal and accounting review has been completed, and whether you are encouraged to have your own advisors review the documentation.
We will hand you all of it and then ask you to have someone else check our work.
Two numbers get you a directional answer: how many caregivers you have and roughly what they earn. The estimator shows what you currently pay in employer payroll taxes, what turnover may be costing you, and the potential payroll tax savings a Section 125 wellness plan could create.
Open the estimatorHome Care Benefits provides marketing and enrollment support and does not provide legal, tax, accounting or health advice. The Unify Wellness Plan is administered by UnifyWell. Savings figures in any proposal are estimates based on the payroll information provided and are not guaranteed. Federal and state tax laws change. Consult your own CPA or attorney before enrolling.