Maximizing Employer and Employee Benefits Through Section 125 Plans
- Greg DuPont
- Jun 20
- 2 min read
In Episode 48 of the March to a Million podcast, host Greg DuPont interviews Reagan Allen to explore a sophisticated benefits strategy that provides measurable financial advantages to both employers and employees.
This episode offers valuable insights for attorneys and financial professionals seeking to deliver innovative solutions to business clients.
Overview of the Program
The featured program utilizes Section 125 (commonly known as cafeteria plans) and provisions originating from the Affordable Care Act to:
Deliver an average of $600 in annual payroll tax savings per participating employee to the employer.
Provide employees with an estimated $125 increase in monthly take-home pay, along with access to enhanced health-related benefits.
Achieve these outcomes at no additional net cost to either party, as the structure is funded through recaptured tax savings.
Mechanics of the Strategy
The system operates by allowing employees to pre-tax qualifying benefits, thereby reducing their taxable wages. This reduction generates corresponding savings for the employer on FICA contributions.
Employees who participate gain access to:
Unlimited primary and urgent care services with zero copays.
Coverage for over 430 prescription medications, generally at no or minimal cost.
24/7 telehealth and tele-veterinary services.
At-home diagnostic lab kits and preventive care services.
Participants complete brief, health-related monthly activities (such as video tutorials) to maintain eligibility for these benefits and associated financial incentives.
Target Audience
This program is well-suited for businesses that:
Employ at least five W2 staff members (owners holding over 2% equity are excluded by IRS guidelines).
Operate in sectors such as legal services, healthcare, construction, manufacturing, hospitality, municipal government, or other industries with meaningful payroll operations.
Are seeking to reduce their health insurance claim utilization, which may lead to lower long-term insurance premiums.
Why This Matters for Legal Advisors
As Mr. DuPont emphasizes, attorneys who work with business clients can present this strategy as a means to deliver substantial, quantifiable value:
For a firm with 30 employees, this approach can yield approximately $18,000 in annual employer savings while enhancing employee compensation and benefits.
Additionally, attorneys may explore opportunities to formalize referral relationships, creating potential for residual compensation.
By introducing forward-looking solutions such as this, legal professionals can strengthen client relationships, elevate their advisory role, and differentiate their practice.
Further Resources
For more information, visit:
Greg DuPont’s book, The Retirement Tax Trap, is also recommended as an essential resource for practitioners seeking to deepen their expertise and expand the value they deliver to clients.
コメント