No black box. Here is the legal architecture, how the money moves, why the reward is not taxable income, and how it fits alongside your health plan.
A self-insured, employer-sponsored group health plan under Section 105 of the tax code. It is a group health plan for ACA purposes and delivers real preventive and clinical care through WellCore360's contracted provider network.
The plan through which an employee pays the cost of participating in the Preventive Care Program on a pre-tax basis. That pre-tax treatment is what lowers payroll taxes for the employer.
The employer is the plan sponsor, Plan Administrator, and Named Fiduciary. WellCore360 is the program's management provider: an independent contractor providing administrative, recordkeeping, and platform services.
There is no carrier and no underwriter. The plan is self-insured by the employer, and benefits are delivered through a contracted provider network. Any description of this program as an indemnity plan is inaccurate.
The employee elects to participate and pays the cost through pre-tax salary reduction under the Cafeteria Plan.
Those pre-tax dollars stay in the employer's general assets until used, consistent with DOL Technical Release 92-01.
Each month, the participant completes a qualifying preventive-care activity.
On completion, they earn a Reward, delivered through normal payroll and identified as a program payment, not wages.
Throughout, the participant has access to the program's menu of preventive and clinical services.
Payroll delivery is a convenience. It avoids cutting a separate check to every participant each pay period, and it does not change what the payment is under the plan documents.
Because contributions are made pre-tax under Section 125, they are treated as employer contributions. Under Section 105, the value of benefits received through a self-insured medical plan is excludable from income to the extent it corresponds to medical care as defined in Section 213(d): care for the diagnosis, treatment, mitigation, or prevention of disease.
The program is designed and operated so that the value of qualifying medical care a participant receives meets or exceeds the reward, leaving no excess. That is achieved through the volume and clinical substance of the services delivered, documented under recognized medical coding, and not billed to the participant's medical carrier, so there is no duplication and no employee cost-sharing.
Detailed valuation methodology is available to your advisors under NDA.
The Preventive Care Program is subject to ACA mandates but cannot satisfy them standing alone, so it must be integrated with an employer-sponsored ACA-compliant group health plan. Two things have to be true, and the distinction matters to your eligible population:
The employer offers its own ACA-compliant group health plan, and every participant is covered under an employer-sponsored ACA-compliant plan at all times.
That coverage does not have to be yours. An employee who waives your medical plan but is enrolled as a dependent under a spouse's employer-sponsored plan still qualifies. What the requirement excludes is an employee carrying no employer-sponsored group health coverage at all.
So your eligible population is everyone holding employer-sponsored ACA coverage from any source. That is usually larger than your medical-plan enrollment and smaller than your headcount. We size savings against that population from your census, not your total employee count.
Run your numbers in minutes, then book a consultation to go deeper with our team and your advisors.
This page describes the program's structure and the legal authority it relies on. It is not legal or tax advice. WellCore360 encourages every employer to have the program reviewed by its own counsel and tax advisor before adoption.
A Section 125 cafeteria plan is an IRS-recognized arrangement that lets employees pay for certain qualified benefits with pre-tax dollars. Because those contributions come out before payroll taxes are calculated, they lower both the employee's taxable wages and the employer's payroll tax base.
A Section 105 arrangement lets an employer provide tax-favored reimbursement of qualified medical and preventive care expenses. WellCore360 uses a self-insured Section 105 preventive care program, paired with the Section 125 plan, to deliver its benefits.
When employees contribute pre-tax through the Section 125 plan, their taxable wages go down. Lower taxable wages mean the employer owes less in FICA, FUTA, and SUTA, and that reduction is what funds the program.
The structure is reviewed by outside ERISA and benefits counsel and evaluated against the authorities that govern it, including Sections 105, 213(d), and 125 and Revenue Ruling 69-154. A written compliance analysis is available to advisors under a nondisclosure agreement.
Yes. Participants must be covered under an ACA-compliant group health plan. Spousal coverage qualifies, and it does not have to be the sponsoring employer's plan.
No. WellCore360 is not a medical plan or insurance. It complements existing coverage and adds benefits alongside it.
