Business Tax Strategy · ProfitGuard Plus
ProfitGuard Plus & SIMRP:
How Employers Cut Payroll Taxes
If you run payroll for W-2 employees, part of every paycheck you cut goes to payroll taxes — the employer side of FICA. Most owners treat that as a fixed cost. It doesn't have to be. ProfitGuard Plus lowers your FICA bill and gives your team more take-home pay at the same time. Nobody's gross pay changes. Here's how it works, why it holds up, and who it fits.
Quick answer
- ProfitGuard Plus is a payroll-tax and benefits structure for businesses with W-2 employees.
- It lowers the employer's FICA bill without changing anyone's gross pay.
- Employers save about $500 to $600 per employee per year in FICA — every payroll, going forward.
- Each participating employee takes home about $40 to $80 more per paycheck.
- It adds free preventive care: telehealth, mental health, care navigation, and chronic condition support.
- It stacks on top of existing medical, dental, vision, and retirement benefits.
- It's built on four IRS codes: Section 125, Section 106(a), Section 105 (SIMRP), and Section 213(d).
- Reimbursement flows through a Self-Insured Medical Reimbursement Plan (SIMRP) under Treasury Reg 1.105-11 — never through the cafeteria plan.
- It reimburses real Section 213(d) medical care — not step counts or gift cards.
- Plan documents are written and reviewed by CPAs and ERISA attorneys before any plan goes live.
- To qualify, employees must be full-time W-2 earners making about $17,000 or more a year.
- Each employee also needs major medical coverage somewhere — their own plan, a spouse's or parent's, Medicare, or the marketplace.
saved per employee, per year, in FICA
The saving repeats every payroll, going forward. At the same time, each participating employee takes home about $40 to $80 more per paycheck — with no change to gross pay. Actual savings vary by payroll structure, participation, and state and local tax.
What ProfitGuard Plus actually does
It reworks how a slice of pay and benefits is treated for tax — nothing more, nothing less. Gross compensation stays the same. The only number that drops is the employer's FICA bill.
It also adds real value for your team. Every participant gets free preventive care — telehealth, mental health support, care navigation, and help managing chronic conditions. And it stacks on top of whatever you already offer: medical, dental, vision, and retirement. You're not replacing anything. You're adding to it.
The four IRS codes it's built on
This isn't a loophole. It's built on four sections of the tax code that have been on the books for years. Each one does a specific job.
Section 125 — Cafeteria Plan
Lets employees make a pre-tax election. This is the front door that makes the pre-tax dollars possible.
Section 106(a) — Employer Health
Lets the employer's health dollars flow to employees pre-tax.
Section 105 + Treasury Reg 1.105-11 — the SIMRP
The Self-Insured Medical Reimbursement Plan. It reimburses employees tax-free — and it does this on its own, NOT through the cafeteria plan. This is the piece most copycat programs got wrong.
Section 213(d) — Qualified Care
Defines the real medical care that gets reimbursed. Actual care — not gift cards, not step counts.
Why it holds up under IRS rules
You're right to be skeptical. A lot of "tax-saving benefit" programs got marketed over the last decade, and about half got shut down by the IRS. The ones that failed made one of two mistakes:
- They ran the reimbursement back through the Section 125 cafeteria plan. The IRS calls that double-dipping.
- They reimbursed things like step counts and gift cards instead of real medical care.
ProfitGuard Plus is built the opposite way. The reimbursement flows through the SIMRP under Treasury Reg 1.105-11 — never the cafeteria plan. The care is real, Section 213(d)-qualified care. And the plan documents are written and reviewed by CPAs and ERISA attorneys before anything goes live. That's the bright line.
Who qualifies — the two gates
There are two simple gates. If your team clears both, the plan fits.
Gate 1 — Full-time W-2 pay
Employees must be full-time W-2 workers earning about $17,000 or more a year.
Gate 2 — Major medical somewhere
Each employee needs major medical coverage somewhere — their own plan, a spouse's or parent's plan, Medicare, or a marketplace plan. This is the 'Integrated 105' design, and it's what keeps the plan clear of the ACA Section 4980D penalty.
Frequently asked questions
What is ProfitGuard Plus?
ProfitGuard Plus is a payroll-tax and benefits structure for businesses with W-2 employees. It lowers the employer's FICA bill and gives each employee more take-home pay — with no change to anyone's gross pay. It also adds free preventive care like telehealth and mental health support, and it stacks on top of the benefits you already offer.
How much can a business save?
About $500 to $600 per employee per year in FICA taxes. That saving repeats every payroll, going forward. At the same time, each participating employee takes home about $40 to $80 more per paycheck.
Is it legal?
Yes. It's built on four long-standing sections of the tax code: Section 125 (cafeteria plan), Section 106(a) (employer health dollars pre-tax), Section 105 with Treasury Reg 1.105-11 (the SIMRP), and Section 213(d) (real medical care). Plan documents are written and reviewed by CPAs and ERISA attorneys before any plan goes live. This is educational, not tax or legal advice — we'll loop in your CPA on your specifics.
Will employees' pay go down?
No. Gross pay stays exactly the same. Because of how the structure works, each participating employee actually takes home about $40 to $80 more per paycheck.
Which businesses qualify?
There are two gates. First, employees must be full-time W-2 workers earning about $17,000 or more a year. Second, each employee needs major medical coverage somewhere — their own plan, a spouse's or parent's plan, Medicare, or a marketplace plan. That 'Integrated 105' design is what keeps the plan clear of the ACA Section 4980D penalty.
Isn't this the kind of program the IRS shuts down?
Being cautious is smart. About half of the 'tax-saving benefit' programs marketed over the last decade got shut down — and they failed for two reasons. They ran the reimbursement back through the Section 125 cafeteria plan (the IRS calls that double-dipping), or they reimbursed things like step counts and gift cards instead of real medical care. ProfitGuard Plus is built the opposite way: reimbursement flows through the SIMRP under Treasury Reg 1.105-11, never the cafeteria plan, and it reimburses real Section 213(d) care. That's the bright line.
This is educational content only — not financial, tax, or legal advice. Actual savings vary by payroll structure, participation, and state and local tax. Check the specifics with your CPA before you decide.
See your ProfitGuard Plus savings
We'll model your exact numbers so you can see the savings for your business. Get the owner's bundle and the savings model on the ProfitGuard Plus page — or call us at +1 (586) 899-1003.
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