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Why a WIMPER Wellness Plan?

Because an ounce of prevention is worth a pound of cure. Health Care is expensive and is somewhat of a crises in this country. The WIMPER program can help! A WIMPER program, or Wellness Integrated Medical Plan Expense Reimbursement, is an employer-sponsored workplace program that allows employees to upgrade their benefits while reducing both the employer’s & employee's healthcare costs. SIMERP (Self Insured Medical Expense Reimbursement Plan) reduces business payroll taxes for each W2 employee, saving the employer thousands of dollars. All the preventive benefits and tax savings while also saving money on existing health plans (without changing anything) employee retention, and reducing your workers' comp premiums in most cases.

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The Challenge: Healthcare is Broken

Current healthcare landscape is EXPENSIVE

The United States has one of the highest costs of healthcare in the world. The projected U.S. healthcare spend for 2025 was $4.9 trillion, which averages to $15,074 per person. By comparison, the average cost of healthcare per person in other wealthy countries is less than half as much.

The average deductible for an individual in 2024 is around $1,787, which is double what it was in 2006 when adjusted for inflation. Roughly 50% of lower-income adults said they wouldn’t be able to afford a $500 unexpected medical bill. Nearly a quarter of those in households with an income of at least $90,000 also said they wouldn’t be able to immediately afford it.

Pairing a wellness program with voluntary benefits reduces unexpected costs and improves financial security. Medical expenses are a leading cause of bankruptcy in the U.S., contributing to nearly two- thirds of cases (American Journal of Public Health). In 2024, the average hospital stay costs over $2,800, and nearly 50% of Americans cannot afford a $500 unexpected expense without borrowing or selling assets (KFF, Federal Reserve). For many, a single health crisis can lead to financial ruin. Voluntary benefits provide ensure stability in both health and finances.

Benefits are usually decreasing while premium costs are increasing at record levels.

Steps in the right direction – A Redirection!

PROACTIVE WELLNESS

PREVENTATIVE CARE MANAGEMENT PROGRAM IS A PARTICIPATORY PROGRAM

The I1 Participatory model was developed under the Affordable Care Act (ACA)

Federal Register, Vol.78, June 3, 2013, pg.33,161

This model is an integrated 105 plan requiring at least one activity per year.

42 U.S. Code 300gg-4 (j)(3)(C)
General Overview

GENERAL OVERVIEW

The Departments believe that appropriately designed wellness programs have the potential to contribute importantly to promoting health & preventing disease.

Clarity on How to Provide Wellness in the Workplace

  • In 2021 the CPA Journal published an article that provides clarity on Wellness in the workplace. This article brought to the forefront the WIMPER and SIMERP structures for providing wellness and preventive care in a tax advantaged way that can truly impact employee health and well being.
  • https://www.cpajournal.com/2021/01/27/20-questions-about-the-establishing-a-health-wellness-program-in-the-workplace/
    Many believe the WIMPER structure outlined in this article is the baseline for how health and wellness should be structured in the workplace. The author,Peter Karl(CPA, Tax Attorney & Professor of Law and Taxation), has become one of the nation's leading authorities on this topic.
  • By following this CPA Journal recommendation, it keeps an employer squarely within the codes and regulations provided by HIPAA, ERISA, The ACA, and the IRS.

The Solution – A Redirection of Care

01

A WIMPER Wellness Program that includes a SIMERP!

02

Our team builds a tailored compliance structure for your workforce.

03

Emergency room visits, urgent care consultations, and other avoidable costs are redirected through preventive care management, giving employees faster access to care while reducing costs for employers and easing the burden on the healthcare system.

Wellness Consultation

Preventative Care Management Program

Legal & Tax Overview:

  • These Preventative Care Management programs operate as an integrated Section 125 medical reimbursement plan, allowing for an annual reimbursement (divided & allocated per pay period) that is excludable from taxable income under IRC Section 105(b), even if the employee incurs or documents no specific medical expenses during a particular month. This is permissible because the program is structured to provide qualified medical care as defined in IRC Section 213(d), which encompasses services for diagnosis, cure, mitigation, treatment, or prevention of disease, including wellness and preventive care.
  • Under IRS guidelines for Section 105 plans, the minimum requirement to maintain the plan's tax-favored status is at least one qualified Section 213(d) medical care activity per year. However, these programs typically exceed this threshold by delivering a robust suite of services. The Preventative Care Management Programs ensure a conservative approach that aligns reimbursements with the substantial benefits provided.
  • A key aspect of compliance is the provision of continuous 24/7 access to qualified Section 213(d) medical care. This can include on-demand primary care, urgent care, mental health support, nutritional consultations, fitness coaching, prescription access, and more - all available irrespective of whether an employee actively uses them in any given period. This ongoing availability satisfies the "irrespective" test outlined in Treasury Regulation § 1.105-1, which allows benefits from an employer-sponsored accident or health plan to be excluded from gross income without requiring proof of specific expenses incurred at the time of reimbursement. The reimbursements are thus treated as payments for medical care furnished by the plan itself, rather than as taxable wages, because the program's design directly ties them to the delivery of substantive, always-accessible medical services that qualify under the statute.
  • This framework mitigates risks of wage recharacterization under IRC Section 3121 and related provisions, as the benefits are rooted in the plan's provision of verifiable medical value, not arbitrary cash payments, protecting against potential penalties.
  • This framework mitigates risks of wage recharacterization under IRC Section 3121 and related provisions, as the benefits are rooted in the plan's provision of verifiable medical value, not arbitrary cash payments, protecting against potential penalties.

The WIMPER (with SIMERP) Program is firmly grounded in established

federal tax law and IRS guidance:

01

Qualified Structure - The program meets the definition of a Self-Insured Medical Reimbursement Plan (SIMERP) under Treasury Regulation §1.105-11, as it is a written plan providing reimbursement for medical expenses.

02

Non-Taxable Employer Reimbursements - Under IRC §105(b), reimbursements for qualified medical care (as defined in §213(d)) are excluded from employee income. The services provided—ranging from physician access to medications and mental health care—clearly fall within this definition.

03

No Itemization Requirement - Congress has repeatedly declined IRS proposals (2023 and 2024 Greenbooks) to require itemization of reimbursed medical expenses under §105(b). As a result, no itemization is required under current law.

04

Tax Treatment Based on Access, Not Usage - Federal tax treatment hinges on access to medical care, not the level of utilization. This is consistent with IRC §106(a), which excludes employer-provided health coverage from income regardless of whether services are used.

05

Insurance Costs Qualify as Medical Care - IRC §213(d) explicitly includes amounts paid for insurance covering medical care within the definition of medical care.

06

Program Qualifies as “Insurance” Under Federal Law - While not regulated as insurance at the state level, the Program meets the federal definition of insurance established in Helvering v. Le Gierse. The program involves real risk transfer, including variability in utilization, frequency, and severity of claims—hallmarks of an insurance arrangement.

In conclusion, the WIMPER/SIMERP Program delivers significant, measurable value to employees while aligning squarely within established federal tax law and IRS guidance. Its structure as a self-insured medical reimbursement plan, combined with the clear statutory definitions of medical care and longstanding tax treatment principles, provides a strong legal foundation.

Final thoughts directly from the CPA Journal article previously mentioned, the WIMPER concept provides an opportunity for employees to receive cash reimbursements for participation in health and wellness programs with the tax saving benefit of reducing FICA tax liability for both the employee and employer. In addition, employees can save income taxes because, when part of a WIMPER program, pretax contributions of gross pay are made to an IRC section 125 cafeteria plan.