Frequently Asked Questions

Optiv Advantage is a supplemental benefit that layers on top of the coverage an employer already offers. It funds real, usable care for employees, telehealth, indemnity cash benefits on covered medical events, and supplemental coverage many hourly and mid-wage workers are rarely offered, and it does so through a Section 125 structure that lowers the payroll tax the employer was already paying. The employer is redirecting a tax it already overpays into a benefit its people can use. Nothing about the existing health plan has to change.

A Section 125 plan lets employees pay for certain qualifying benefits with pre-tax dollars. Because those dollars come out before payroll tax is calculated, the wage base both the employer and the employee are taxed on goes down. The employee keeps more of each paycheck, and the employer deposits less payroll tax. It is a long-standing part of the tax code, in routine use for over four decades.

No. Optiv Advantage is supplemental and works alongside your existing major medical coverage. For larger employers, major medical remains the compliance baseline, and Optiv Advantage layers on top of it. For smaller employers, it can stand on its own as a meaningful benefit. Either way, there is nothing to switch and nothing to cancel.

A payroll company runs your deductions. A broker recommends plans. Optiv designs and operates the benefit architecture itself, the plan documents, the compliance support, the carrier relationship, and the ongoing administration, so the structure is built correctly and maintained rather than handed to you as a document to manage. The plan is calculated to your workforce, not pulled off a shelf.

A fixed indemnity benefit pays a set cash amount when a specific covered event happens, such as a hospital stay, an emergency room visit, or ambulance transport. It is not health insurance and does not replace it. It is a cash benefit that helps with the costs that come with a medical event, paid directly to the employee.

Optiv Advantage is the core supplemental benefit. Optiv Access brings entry-level virtual care to part-time, seasonal, and contingent workers who do not qualify for the full plan, and is always paired with Advantage. Optiv CompleteCare is the ACA-compliant major medical layer that becomes relevant near the 50-employee threshold. Optiv PremierCare adds dental and vision to CompleteCare. One architecture, four plans, matched to where an employer sits.

Yes. The structure is built on established sections of the tax code, Section 125 for the pre-tax election, Section 105 for the benefit substantiation, and Section 213(d) for the qualifying expense definition, and it is operated with the plan documents, nondiscrimination testing, and substantiation those rules require. A 2025 tax opinion on file supports the design.

A properly documented plan is built to be audit-ready, with the plan documents, testing, and substantiation maintained as a matter of course. What matters is that the structure is run correctly, which is why the administration and compliance support are part of the program rather than left to the employer. We will not tell you that any tax structure carries zero possibility of question. We will tell you that this one is designed to be defended on its documentation, and that the documentation is maintained for you.

The plan is administered with pre-approved documents, a compliant Section 125 structure, and a licensed third-party administrator, so the records an examiner would ask for are kept current and complete. Because Optiv maintains that documentation rather than the employer, audit readiness is built into how the plan is run, not assembled after the fact.

Yes. A 2025 tax opinion on file analyzes the structure and its basis in the tax code. Employers evaluating the plan can review the relevant compliance materials as part of the proposal process.

Because the pieces are old but assembling them well is uncommon. Section 125, Section 105, and Section 213(d) have been in the code for decades and are used every day in isolation. What is rare is combining them into a maintained benefit structure aimed at the hourly and mid-wage workforce, rather than selling a generic plan document. Most payroll administrators never built this; they run deductions. That is the difference, and it is why it can feel new even though the foundation is not.

The honest answer is that there are tradeoffs rather than a catch, and we state them plainly elsewhere on this page: lowering the wage base can slightly affect an employee's future Social Security calculation, the indemnity benefit carries a tax question on any excess, and the structure only works if it is run correctly, which is why the administration is part of the program. What there is not is a hidden fee to the employer or a cost shifted onto the existing health plan. The savings are produced by a tax you already overpay, not by taking something from your people.

The portion of an indemnity benefit that reimburses a real qualifying medical expense is designed to be received without income tax. Any amount paid beyond the expense actually incurred, the excess, is potentially taxable, and we always describe it that way. One related question is genuinely unsettled: whether that includable excess is also treated as wages for payroll-tax purposes. The better-supported reading of the statute is that it is not, because wages are payment for services and an indemnity benefit is paid because a medical event occurred. The point has not been decided, and we do not claim a result. Our gated white paper sets out the full analysis for advisors who want it.

The savings come from the 7.65 percent FICA recovery on every pre-tax election, which is structural, meaning it happens whether or not any claim is ever filed. Most employers can save up to approximately $650 to $950 per enrolled employee each year, and some have saved as much as mid six figures across their full workforce, with the exact figure modeled to your census. The range depends on participation and election levels, which is why the precise number is produced in a census-based proposal rather than promised up front.

Every payroll run, an employer deposits its 7.65 percent FICA contribution along with the rest of payroll. When an employee elects a pre-tax premium under the plan, the wage base that deposit is calculated on goes down, so the employer deposits less on the very next payroll run. There is no rebate to wait for and no new process to run. The deposit is simply smaller, automatically, going forward.

There is a per-employee administration fee, and the FICA recovery is reported net of that fee, so the savings figures already account for it. There is no separate out-of-pocket implementation cost to stand the plan up. The employer is not writing a check to add a benefit; it is redirecting payroll tax it already pays.

The fair way to say it is this: the benefit is funded by recovering payroll tax the employer already overpays, so it does not require new budget the way adding a traditional benefit would. That is simply how a Section 125 election works, not a gimmick. The honest qualifier is that there is an administration fee, already netted out of the savings figures, and the savings depend on real participation. It is not free money; it is money you already spend, redirected.

On the next payroll run after the plan goes live. Because the wage base drops the moment pre-tax elections are in place, the lower FICA deposit happens on the very next cycle, not at year end and not as a refund.

The recovery scales with participation, so lower enrollment means lower total savings, simply because the wage-base reduction applies to fewer people. The per-employee logic does not change. This is one reason enrollment support and clear employee communication are part of the program, and one reason the proposal models your expected participation rather than assuming everyone enrolls.

No, the opposite. Because the pre-tax election lowers the wages withholding is calculated on, most employees see more in each paycheck, not less. Employee take-home varies from as little as $5 a week to over $100 a month, depending on income, elections, and withholding, and is modeled to each person's situation.

A pre-tax deduction for the elected premium, and lower tax withholding as a result. The net effect for most employees is a higher take-home figure than before the election. The plan also pays qualifying benefits and rewards through payroll, which appear as they are paid.

It can, slightly. A Section 125 election lowers the wages Social Security uses in its benefit calculation, so in principle it can reduce a future benefit by a small amount. For most participants the effect is minor relative to the take-home gain today, and for higher earners above the Social Security wage cap there is generally no effect on the benefit at all. The honest answer is that there is a small tradeoff, and a participant close to retirement who wants to weigh it should run their own numbers with a tax advisor.

It can change the math, because less tax is withheld during the year. For most employees the result is more money in each paycheck rather than a larger refund at filing, which is the same total handled earlier. Individual situations vary, and an employee with questions should check with their own tax advisor.

The employee's premium is paid through the pre-tax election rather than as a separate bill, and for most participants the take-home pay still goes up because of the tax effect. There is no separate charge an employee pays on top of their normal paycheck to participate.

The plan is a supplemental benefit and is not a substitute for unemployment or workers' compensation coverage, which continue to operate under their own rules. Because those programs use their own wage definitions, employers with specific questions about their state's treatment should confirm with their advisor as part of plan setup.

Generally, W-2 employees who meet the plan's hours threshold are eligible, typically those working about 20 or more hours a week. Plan design can also accommodate union employees and other workforce structures. The specific eligibility rules are set during plan setup and tested for compliance.

This is where Optiv is built differently. Part-time, seasonal, and contingent workers who do not qualify for the full plan can be covered through Optiv Access, which brings entry-level virtual care to exactly the workforce traditional benefits leave out. Access is always paired with Advantage. The employer controls eligibility across several levers, such as waiting period, minimum hours, and tenure.

Eligibility for owners and key employees depends on entity type and on nondiscrimination rules, and certain owners, such as more-than-2-percent S corporation shareholders, are treated differently under the tax rules. This is a real constraint rather than a detail, and the right answer for a given business is confirmed during plan setup. The plan is tested to meet the nondiscrimination standards that apply.

Generally no. Section 125 plans are built for W-2 employees, because the pre-tax election operates through payroll. Independent contractors paid on a 1099 basis are not part of payroll in the same way and are typically not eligible. Workforce structures vary, so edge cases are confirmed at setup.

Union employees can be included, and the plan can be structured to work alongside a collective bargaining agreement. The specifics depend on the agreement and are handled during plan design.

Participation is voluntary for employees. Eligible employees are typically enrolled with clear communication and a straightforward way to opt out, which is how the program reaches the high participation that makes the benefit work while keeping the choice with the employee.

Yes. A group can implement at any time, and the plan builds in the enrollment windows and annual open enrollment periods that the structure requires. You are not limited to a single calendar date to begin.

Section 125 rules generally limit election changes to once per plan year, unless a qualifying life event occurs, such as marriage, the birth of a child, or a change in employment status. Those events open a window to adjust. This is a function of the tax rules, not a plan-specific restriction.

The pre-tax election ends with the employment, the same way other payroll-based benefits do. The specifics of any continuation are handled as part of standard offboarding, and the administration team supports the transition so it does not fall on HR to track manually.

Treatment during a leave depends on the type of leave and on plan terms, and the administration team handles the mechanics so the employee and HR have a clear answer rather than a gap. Specific leave scenarios are confirmed during setup.

A typical go-live runs in about 40 days, from collecting payroll data through testing to the plan activating on the next scheduled payroll. Timing depends on your payroll cycle, because full cycles are needed to complete testing before the plan goes live.

Minimal, by design. Implementation, employee education, enrollment, documentation, and ongoing support are handled by the program team and a licensed third-party administrator. The plan is built to be a supported program rather than a do-it-yourself plan document handed to HR to run.

Yes. The plan is configured to run through your existing payroll, with the pre-tax deductions set up during implementation. There is no new payroll software to adopt.

No. Optiv Advantage layers on top of your existing coverage. Nothing about the current health plan has to change, and there is nothing for employees to switch.

Once live, the plan runs through payroll with the deductions in place, and the compliance documentation, testing, and plan amendments are maintained by the program team. The employer's ongoing obligation is light, which is the point of the structure.

Optiv maintains the Section 125 documentation, the summary plan description, and plan amendments, and a licensed third-party administrator handles claims and member service. The employer carries the benefit, not the paperwork.

The plans operate independently. A Section 125 election lowers wages for income and payroll tax purposes, and the interaction with retirement plan definitions of compensation can vary by plan document, which is a detail confirmed during setup so your retirement plan is treated correctly. The benefit does not replace or compete with a 401(k).

Optiv Advantage is supplemental and is designed to coexist with existing pre-tax accounts. Because account types carry their own rules, any coordination, particularly with an HSA, is confirmed at setup so elections are structured correctly. The plan layers on rather than replacing what employees already use.

At or near 50 full-time-equivalent employees, an employer becomes subject to the ACA employer mandate and major medical compliance obligations. Optiv CompleteCare is the ACA-compliant major medical layer built for that threshold, and Optiv Advantage continues to layer on top of it. Our ACA compliance guide covers the threshold in detail.

Yes. Optiv Advantage is designed to layer on top of existing coverage arrangements, including minimum essential coverage. For larger employers, that baseline remains the compliance foundation, with Advantage supplementing it.

A full virtual care team including primary, urgent, and behavioral care, telehealth with no copay, supplemental accident, critical illness, and cancer coverage many in this workforce are rarely offered, fixed cash indemnity benefits on covered events such as a hospital stay or ER visit, the Health Maintenance Benefit, and access through a single member app for the whole family. Plus a measurable increase in take-home pay.

The Health Maintenance Benefit is a named benefit within the plan, paid to the employee through payroll in connection with qualifying Section 213(d) events. It is part of what makes the benefit something employees feel rather than a policy they never use.

Telehealth covering primary, urgent, and behavioral care, available with no copay, for the employee and family. For part-time and contingent workers who do not qualify for the full plan, Optiv Access brings entry-level virtual care, paired with Advantage.

Coverage is provided by an A-rated, state-licensed insurance carrier. The carrier rating and licensing are part of the diligence the structure rests on, and the relevant detail is available through the proposal process.