Before You Sign

Last episode, we talked about the owner's side of this, the payroll tax math. And if you missed that one, the short version is there's a part of the tax code that lets a business save real money on payroll taxes without cutting anyone's coverage. But every owner I explain this to asks the same question next. Okay, what's the catch for my people? What does my team actually get out of this? That's the right question. So today, the employee side, plain English, no pitch.

Here's what an employee hears when a benefits change gets announced. Something's being taken away. Maybe the plan is changing. Maybe my paycheck is about to shrink. That worry is fair, because that's how most benefits changes go. This one is different, and I wanna walk through exactly why. Three things happen for an employee on a plan like this.

Thing one, their paycheck. Part of their pay runs through a pre-tax plan before payroll taxes are figured. Because that piece isn't taxed like regular wages, the math offsets itself. Take-home pay stays about the same. And in many setups, it actually comes out a little ahead. Often somewhere around $40 to $80 more per paycheck. Not life-changing money, but it's moving in the right direction, not the wrong one.

Thing two, they get benefits they didn't have before. Preventive care, wellness visits, health coaching, screenings, that kind of thing, at no cost to them. This is the part people don't expect. It's not a discount card and it's not a replacement plan. It's an added layer of care that's built into how the plan works.

Thing three, and this is the one to say out loud in the break room. Nobody touches their health insurance. They keep the exact major medical plan they have today. Same card, same doctors, same coverage. This plan sits on top of what they have. If someone tells you a plan like this replaces your insurance, that's a different product and a red flag.

Now, if you're thinking, wait, the employee comes out ahead, the employer saves money and nobody loses coverage, where's the money coming from? A fair question. The answer is it comes from taxes that were leaving the building anyway. When pay runs through a qualified pre-tax plan, the wages that payroll tax gets charged on go down. That's the pool the whole thing is funded from. It's the same reason a 401(k) works the way it does. The tax code rewards certain kinds of plans on purpose, because Congress wants employers helping with health costs.

The catch, because there's always one, is that it only works if it's run exactly to the rules. Written plan document, qualified expenses only, real administration. Done sloppy, it's a problem. Done right, it's been clean for years. That's the whole next episode, by the way: how to tell the real thing from the junk.

So if you're an owner and you've been holding back because you didn't wanna rock the boat with your team, this is the boat-steadying version. Their pay holds, their coverage holds, and they gain a benefit. The way to know what it looks like for your business is to run your actual numbers: your headcount, your payroll. If this was helpful, the full writeup is on our site and the link is below. Take care of your team. It's the best investment you've got.

Welcome, welcome everybody to Before You Sign. This is your host Anthony Buck. This is our pilot podcast. So welcome everybody. Basically the goals of these podcasts are just to educate people and basically provide them with the information and the clarity as to what we do here in the financial services business, so that they can make the best decision for themselves moving forward.

So we'll be launching a series of different episodes that kind of focus on different topics, things that we focus on in the industry in terms of insurance and dollars and business tax strategy. So kind of a jack-of-all-trades here, but I wanted to welcome everybody to the show. If I do sound nervous, it's my first one, so I do apologize.

Today we're gonna be focusing on what we like to call our ProfitGuard Plus. This is a business tax strategy that helps lower payroll taxes, that basically anybody can qualify for as long as you have W-2 payroll and as long as you meet a couple of very minimal essential requirements, like offering health benefits and having employees that work full-time.

So one of the questions we like to ask is: can a small business lower payroll taxes and help employees keep their health coverage at the same time? The answer is yes. But in 2026, small business health premiums rose about 11%, and the average employer now spends over $17,000 per employee on coverage. On top of that, the enhanced ACA subsidies that helped many workers afford their own plans expired at the end of 2025, so employees are feeling that squeeze too.

One tool that a business owner can look into is what's called ProfitGuard Plus, or a Section 125 plan paired with a reimbursement program. When this is done right, it lets employees run part of their pay through a pre-tax plan for qualified medical costs. That lowers the wages that FICA is charged on, so the employer saves about 7.65% in payroll tax on that amount, which is roughly about $600 per employee per year in a common example. The employee will take home a little bit more on their paycheck, and they'll keep their existing major medical insurance. By the way, this isn't a replacement for their health plan. It actually sits on top of it.

A lot of folks know what a Section 125 is, especially if you've got a health insurance broker or you're working with CPAs or tax strategists. They all know what this is. It's not the code itself. It's how we structure our program to work alongside Section 125, along with a slew of other IRS tax codes. And for full disclosure, we have been audited before: ERISA audited, IRS audited. Never had an issue, never had a complaint. Everything that we're doing is legit.

The business that we work with has pioneered this strategy, so our job is just to explain how it works and educate business owners on how they can lower their taxable liability and how they can offer some supplemental benefits to their employees for no additional cost. So kind of a no-brainer. What this does is sit on top of your Section 125, as I mentioned, and it only really works when it's set up with a written plan document and run to the IRS rules. That's why we have a professional that's been doing this for about a decade or longer.

If you own a business with a team and your benefit costs just jumped, it's worth a 15 minute conversation. You reach out to me or one of my associates and we'd walk you through how the program works. We do all the heavy lifting. We carry all the paperwork and the back office stuff, so it's very low lift for your HR department. We know businesses are always busy, so we want to take as much of that burden off them as possible.

If you own a small business, you've probably already felt this. The insurance renewal came in and the number went up. You're not imagining it. For 2026, premiums climbed around 11% again. And here's the thing that makes it worse: a lot of people used to lean on the marketplace and those extra subsidies that made individual health care affordable, but those enhanced subsidies expired at the end of 2025.

So we're gonna walk you through one thing that actually works. Again, this isn't a sales pitch. It's just how it works, so you can decide if it's worth the conversation. Most owners think they only have two moves when benefit costs go up: they eat the cost, or they pass it to the team. Both hurt. Your margin shrinks, or you pass it on and your best people start looking around at other job opportunities.

But there is a third door that people have never really heard about or had explained to them. It doesn't cut your coverage. It doesn't cut your employees' take-home pay. It's a part of the code that's been around for years. Most people just never set it up or have never heard of it. Again, that's Section 125 paired with a bunch of other tax codes, like 105, 106 and 1.105-11. I don't want to get into too much of the jargon. That's what we go over on our consultations.

There's one thing we want to point out, because you're gonna hear a lot of noise about these plans. It only works when it's done right. It needs a real written plan document that follows the IRS rules on what counts as a qualified medical expense. There are promoters out there who oversell these and cut corners. It's called double dipping, and the IRS has warned exactly about it. So this isn't a do-it-yourself, download-a-template deal. This isn't an ask-Claude-or-ChatGPT-how-to-set-this-up deal. You need to trust a professional to do it.

So why do I bring this up now? Because timing is the whole thing. Costs just went up, and they're gonna continue to go up year after year. Most owners are about to either eat that increase or pass it off to their employees.

So if you're an owner with a team and your benefit costs just went up, here's what I'd do. Sit down for about 15 to 30 minutes. We'd go over what it would actually look like for your business. We'd run real numbers, your headcount and your payroll, and show you what the savings would look like for you specifically. Not a guess, not anybody else's numbers, not averages. Your numbers. Our consultation doesn't cost anything. We just want to provide the information. We show you the strategy, we show you how it works, we educate you on what the program offers, and then we do all the lifting on the back end.

The only thing that you're really responsible for is getting us a census or a payroll statement. We usually work with HR or benefits for that, or if you work with a staffing company, a payroll service company or a PEO, those are great connections. We can bypass any of the lifting for you.

That's all for today. We just wanted to go over ProfitGuard Plus and open it up with a very light and brief episode. There's gonna be a lot more detail that we crack open when it comes to the specific programs, and by programs I don't just mean this. I'm talking about all of the things that we do here at Ten Point Financial Group. Thank you so much. Stay tuned, and as we get feedback and more questions coming in from our audience, we'll probably start to extend these as time goes on.