Wellness benefits plans that are set up as an indemnity‑style program within a Section 125 pre‑tax cafeteria plan offer many powerful benefits. These programs can be setup side-by-side with your current benefits programs and offer the following noteworthy advantages: (i) improved talent acquisition & employee retention, (ii) ongoing payroll tax savings, (iii) clear, predictable costs, (iv) simple administration, (v) high employee participation, and (vi) enhanced employee & company health ROIs.
This article summarizes the above-mentioned benefits along with the details of the impressive features of today’s employee wellness benefits programs.
- On-Going Tax Savings:
By funding your wellness benefits through a Section 125 salary‐reduction program, a business can convert what would be taxable wages into pre‑tax contributions. Employees save on federal income taxes, Social Security, Medicare — and often on state taxes — while the business reduces its’ share of payroll taxes. For a company with 100 eligible employees, the average company’s savings is $50,000.00 per year !
The program I am currently recommending to my clients require ten-(10) or more W-2 employees, who work more than 30 hours. In most cases, the wellness plan premium to the employee is more than covered by the employee’s payroll tax savings, which means that the program is not only free to the employee but also results in a little more take-home pay every week.
- Improved Talent Acquisition and Employee Retention:
Offering a tax‑advantaged, flexible wellness package signals to your people that you value their well‑being. An “employee wellness program” not only helps a company with employee retention but also elevates your business as an “employer of choice” in today’s competitive employment marketplace.
- Clear, Predictable Costs:
An indemnity‑based wellness program lets you define exactly how much you’ll pay for each qualifying activity – for example, up to $50/month for gym memberships or $25 per completed health screening. That cap keeps your wellness budget from ballooning and makes financial planning straightforward.
- Simple Administration:
Because these wellness reimbursements piggyback on your existing Section 125 plan, there’s no need for a separate enrollment system or standalone testing — participants elect the benefit once, and payroll‐deduction handling, nondiscrimination testing, IRS filings, etc., all remain centralized. The employee has easy access to the wellness program via the insurance carrier’s APP, and the employer enjoys a quick enrollment process and free IT set up support.
- Higher Participation:
Making wellness incentives “cheaper” by paying them out of pre‑tax dollars boosts employee participation. A strong wellness program can be very impactful to an employee and his or her family, even if you offer employee health benefits.
- Better Health ROI:
As more employees participate in the many different wellness programs — whether it be preventive screenings, fitness challenges, or smoking‐cessation programs — both the employee and the company begin to see the many possible downstream benefits, such as fewer sick days, better focus, and a slowdown in overall medical‐claims.
The wellness program I am recommending offers personalized programs, such as:
- chronic disease management;
- prescription assistance (including free prescriptions;)
- health risk assessments;
- weight management counseling;
- a diabetes program;
- a biometric facial scanner for real-time health screening;
- health education programs;
- a fitness & nutrition library;
- annual vital labs – at no cost to the employee;
- care for the entire family; and even includes virtual pet care coverage.
- In addition, this employee wellness program offers unlimited telehealth benefits covering primary care, urgent care, virtual ER telemedicine, behavioral health, dermatology advice and AI driven lab tracking.
Employee wellness programs offer numerous benefits that contribute to both individual well-being and organizational success. By promoting healthier lifestyles, reducing stress, and supporting mental and physical health, these programs lead to increased employee satisfaction, higher productivity, and reduced absenteeism. In turn, companies benefit from lower healthcare costs, improved morale, and stronger workplace engagement. Ultimately, investing in employee wellness fosters a positive work culture and creates a more resilient, motivated workforce. Today there is no reason not to include this wellness program as part of your employee benefits plan !
About Greater Prairie Business Consulting, Inc.:
Greater Prairie Business Consulting, Inc. is an award-winning, national consulting practice serving entrepreneurs, small to mid-sized privately held and family-owned businesses and middle-market companies of any type with revenues between $1 million and $250 million. The firm helps small, mid-sized and middle market companies maximize their performance and exit.
Greater Prairie Business Consulting, Inc. can be reached by calling 1-800-828-7585 or emailing info@gpbusinesssolutions.com.
About the Author:
James J. Talerico, Jr. is an award-winning author, speaker, and a nationally recognized small to mid-sized (SMB) business expert.
With more than thirty- (30) years of diversified business experience, Jim has a solid track record and an A+ BBB rating helping thousands of business owners across the US and in Canada tackle tough business problems to improve the performance of their organizations.
His client success stories have been highlighted in the Wall St. Journal, Dallas Business Journal, Chicago Daily Herald, and on MSNBC’s Your Business. He was named “Texas Business Consulting CEO of the Year,” by CEO Today Magazine, identified as a “Top 10 Management Consulting Entrepreneur to Watch in 2023” by Entrepreneur Magazine, was listed among the “10 Most Visionary Companies to Watch in 2023” by Inc. Magazine, and has also been ranked among the “Top Small Business Consultants” followed on Twitter.
For more than half a decade, Jim was a regular guest on “The Price of Business,” a nationally syndicated radio program on Bloomberg Talk Radio and has also appeared as a subject matter expert on many FOX Radio interviews. He is a regular contributor to several blog sites and has frequently been quoted in publications like the New York Times, Dallas Morning News, Philadelphia Inquirer, The Entrepreneur’s Review, and on INC.com, in addition to numerous, other industry publications, radio broadcasts, business books, and Internet media.
Jim received a Gold “Stevie Award” for “Thought Leader of the Year,” a Gold “Stevie Award” for “Media Hero of the Year During Covid” and a Bronze “Stevie Award” for “Best Entrepreneur” in the Category of “Business and Professional Services” at the American Business Awards ® in New York City. The competition received more than 3,700 nominations and is the premier accolade for business excellence in the US honoring organizations of all sizes and industries. Jim also received an “Outstanding Leadership Award” at the Money 2.0 Conference for his contributions to the financial services industry.
Jim is the author of “8 Steps to Becoming an ETHICS FOCUSED ORGANIZATION,™” a small business certification program that utilizes a unique eight – (8) step approach for strengthening ethics in any organization. The certification program won the Better Business Bureau’s “Torch Award for Ethics” for the North – Central Texas Region, the International Better Business Bureau’s “ Torch Award for Ethics,” and a Gold “Stevie Award” for “Ethics in Sales” at the International Sales & Customer Service Stevie Awards ®. Participants who complete this certification program are eligible to receive eight – (8) continuing education units from the University of Texas’ Division of Enterprise Development.
Jim received his Certified Business Exit Consultant (CBEC)® designation from The International Exit Planning Association (IEPA) to help entrepreneurs, small business owners, family businesses, and middle market companies maximize their business exit, and he received his certification in succession planning from the ASPE.
Jim is also a Certified Management Consultant (CMC)® and an active member of the Institute of Management Consultants. The Certified Management Consultant ® mark is awarded by the Institute of Management Consultants USA (IMC USA) and represents evidence of the highest standards of consulting, a commitment to continuous development, and an adherence to the ethical canons of the profession. Less than 1% of all consultants in the world are Certified Management Consultants (CMC.)®
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