How the plan works.
Most benefit plans cost the employer money. This one recovers money the employer was already overpaying, and raises the employee's take-home pay at the same time. Here is the mechanism, piece by piece, so you can see where every dollar comes from.
The numbers, up front
Every figure is modeled to your census, not promised.
Pre-tax election
Lowers the wage base the employer and employee are taxed on.
Up to $957
Employer payroll tax recovered per enrolled employee, per year.
$5/wk to $100+/mo
The range of added take-home pay for the employee.
The one idea everything rests on
Payroll tax is calculated on the wage base — the portion of pay Social Security and Medicare are figured on. A Section 125 plan moves a qualifying premium out of taxable wages before that tax is calculated. Everything else builds on that one move.
The wage base
The slice of pay that payroll tax is calculated on.
A Section 125 election
Moves a qualifying premium out of the wage base before tax is figured.
A smaller base, less tax
Less tax on both the employer and the employee side, in the same pay period.
Where the extra money actually comes from
One move — a pre-tax Section 125 election that shrinks the wage base payroll tax is figured on — pays off on both sides of the paycheck.
The employer side
Your 7.65% FICA is now figured on a smaller wage base, so the deposit on the very next payroll run is smaller. It is not a rebate or a later check — you simply deposit less and keep the difference: up to $957 per enrolled employee per year, net of the fee, modeled to your census.
The employee side
The pre-tax premium lowers the employee's own taxable wages, so income tax and FICA both drop, and a fixed indemnity benefit pays cash on covered medical events. The plan is built so no participant takes home less — take-home rises from as little as $5 a week to over $100 a month.
Why the structure holds
A plan that lowers taxes has to be built on the tax code, not around it. Three features carry the weight, with the roles cleanly separated.
Built on the code
Section 125, Section 105(b), and Section 213(d) work together as the legal basis, with every payment measured against documented medical coding.
Fully insured
The plan is fully insured. The carrier bears the claims risk. The employer never pays claims.
Substantiated
Substantiation ties every payment to a real qualifying medical event, and the employer stays the plan sponsor, not the payer.
Once you decide, how it gets turned on
The mechanism above is the plan; this is the rollout, and it is deliberately light on you: about 40 days from signed agreement to go-live, with roughly two and a half hours of employer time in total. Optiv handles the four phases below.
1
Phase 1: Data & Configuration (Days 1–3)
Sign the Data Access Agreement. Optiv securely pulls your payroll census, structures the data, and configures the §125 deductions inside your payroll system — no manual work needed.
2
Phase 2: Payroll Testing (Days 4–32)
Optiv runs multiple payroll simulations to validate the deductions and tax calculations, so everything is accurate before rollout.
3
Phase 3: Employee Enrollment (Days 28–38)
Optiv's team runs enrollment and employee outreach, keeping engagement high with minimal effort from your HR staff.
4
Phase 4: Go-Live & First Payroll (Days 38–40)
The plan goes live and deductions begin. After go-live, each payroll cycle adds only about five minutes: drop the report into the calculation engine, and the updated payroll comes back.
Know your numbers, before you make the call
Every figure here is structural and modeled, not promised. Indemnity payments are potentially taxable on the excess above documented Section 213(d) expense, and that wage-treatment question is genuinely unsettled. This page is educational, not legal or tax advice.
IRC §§125, 105(b), 213(d), 3121, 3306
Pre-tax elections, medical-benefit exclusions, the definition of medical care, and the exclusion of §125 salary reductions from the FICA wage base.
IRS Publication 15-B
Employer's Tax Guide to Fringe Benefits.
Optiv Advantage program data
FICA recovery up to $957 per enrolled employee per year, net of the fee; employee take-home from $5 a week to over $100 a month.
The plan is engineered. The math is yours.
Every figure here is structural and modeled, not promised — employer recovery is up to $957 per enrolled employee per year, net of the fee and drawn from your census, and employee take-home varies by pay, elections, and state. This page is educational, not legal or tax advice. Calculated, not recommended.
The Optiv Group helps employers evaluate tax-advantaged benefits strategies, payroll-linked savings opportunities, and modern coverage paths with compliance-aware plan design.
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Educational content only. Savings estimates are not guarantees and require plan-specific review.