Viventiq combines two components:
- A fully-insured supplemental health benefits program
- A compliant Section 125 Cafeteria Plan structure
Section 125 has existed since 1978 and allows certain health benefits to be paid on a pre-tax basis. Viventiq leverages this long-established provision to create tax efficiency for both employers and employees.
Here is how it works:
- Employees elect to participate and may opt out at any time. Participation is voluntary.
- The employee premium for the fixed indemnity policy is deducted from wages on a pre-tax basis. Because the deduction occurs before taxes are calculated, taxable income decreases.
- As taxable wages decrease, payroll taxes also decrease. Employers save on FICA taxes because those taxes are calculated on a lower wage base. Employees often see higher net take-home pay due to reduced federal income and payroll taxes.
- When employees use eligible benefits, they receive payment in addition to what their current insurance provider may cover. These payments provide supplemental financial support for covered medical events and wellness services.
- The key to tax efficiency is the pre-tax treatment under Section 125. This is not a workaround or temporary strategy. It is a long-standing component of the tax code designed to support health-related benefits.
