Compliance & Legal Foundation
The Preventive Care Benefits Program is built on well-established sections of the Internal Revenue Code and ACA regulations. Our program ensures full compliance with all applicable federal laws and IRS guidance.
Legal Authorities
Exclusion of Employer-Provided Health Benefits
Provides that amounts received by an employee through employer-provided accident and health plans for medical care are excluded from gross income.
Relevance: The PCBP's preventive care benefits qualify as employer-provided medical care excludable from employee income under this section.
Employer-Provided Coverage Under Accident and Health Plans
States that gross income of an employee does not include employer-provided coverage under an accident or health plan.
Relevance: Establishes that employer contributions to the PCBP are not taxable income to employees.
Cafeteria Plans
Allows employees to choose between taxable and non-taxable benefits (including accident and health plan coverage) through salary reduction agreements.
Relevance: The PCBP utilizes a Section 125 cafeteria plan structure for the pre-tax payroll deduction that funds the program.
Definition of Medical Care
Defines medical care to include amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease.
Relevance: The preventive care benefits provided under the PCBP meet the definition of medical care under this section.
ACA Participatory Wellness Programs
Defines participatory wellness programs that do not require individuals to satisfy a standard related to a health status factor and establishes compliance requirements.
Relevance: The PCBP is structured as a participatory wellness program under this provision, ensuring ACA compliance.
IRS Chief Counsel Advisory on SIMRP Structures
IRS Chief Counsel Advisory memorandum addressing the tax treatment of certain self-insured medical reimbursement program structures.
Relevance: The program is structured in full compliance with the guidelines and requirements outlined in this advisory.
What This Program Is Not
- ✕Not a group health insurance plan — does not replace or interfere with existing health coverage
- ✕Not an HRA or FSA — requires no employer funding or employee salary sacrifice
- ✕Not subject to COBRA — program benefits end with employment
- ✕Not a tax shelter or loophole — built on established IRC sections and affirmed by IRS guidance
Ready to Save on Employer Taxes?
Schedule a complimentary discovery call to see how much your business can save with the Preventive Care Benefits Program.