Premiums outpace budgets
Renewal increases regularly run ahead of what was planned for, leaving less room to invest anywhere else in the business.
For employers with 20 or more employees
Oak125 · Section 125 supplemental benefits
Give employees a raise, without adding a line to your budget
Oak125 layers a Section 125 supplemental plan on top of your existing major medical coverage, increasing take-home pay for employees and lowering payroll tax for you, at no net cost to most employers.
*Figures below are illustrative, from the weekly paycheck example on this page. Actual results vary by census, wage structure, participation and plan design.
+$19/wkMore take-home pay for the employee in our paycheck example*
≈$1,100Employer FICA recovered per enrolled employee, per year*
100%Funded by Section 125 tax incentives
Nothing replacedYour major medical plan and broker stay exactly as they are
The challenge
Health benefits are getting more expensive to offer and harder to keep competitive
Every year, employers face the same squeeze: costs go up, coverage feels flat, and good people leave for better packages.
Take-home pay feels stagnant
Wage increases get absorbed by rising deductibles and out-of-pocket costs, so employees don't feel the raise they were given.
Benefits drive who stays
A thin benefits package is one of the quiet reasons strong employees start looking elsewhere, and replacing them costs far more than keeping them.
The Oak125 approach
A supplement to your plan, not a replacement for it
Oak125 is a 100% voluntary, IRS Section 125 qualified supplemental plan. It sits alongside your current major medical coverage and broker relationship. Nothing about your existing plan changes.
- Higher net pay or no enrollment. Employees are auto-enrolled only if their take-home pay goes up, and may opt out at any time.
- Lower payroll tax on both sides. Pre-tax payroll contributions reduce FICA liability for both employer and employee.
- Real benefits for members. Hospital indemnity, a $0-copay care suite and free tax advice for members.
- No disruption. Does not replace or interfere with your existing broker or major medical carrier.
How it works
Four steps, on your existing payroll
Pre-tax election
Each enrolled employee pays the indemnity premium pre-tax through a Section 125 election.
Lower taxable wages
Taxable wages fall, so income tax and FICA withholding fall, for the employee and the employer match.
Fixed benefit paid
When a qualified medical event occurs, the policy pays a fixed benefit straight into the paycheck.
Higher net pay
Employees are auto-enrolled only if their net take-home pay is higher with the plan, and may opt out at any time.
Sample paycheck
Both sides of the paycheck move
A paycheck comparison is generated for every enrolled employee, with every payroll run. In this example the employee is paid weekly; major medical premium and other deductions are the same in both columns.
| Weekly paycheck | Without plan | With plan |
|---|---|---|
| Weekly gross pay | $1,000.00 | $1,000.00 |
| Indemnity plan premium (pre-tax) | $0.00 | $276.92 |
| Taxable income | $1,000.00 | $723.08 |
| Federal withholding | $80.80 | $47.57 |
| Social Security | $62.00 | $44.83 |
| Medicare | $14.50 | $10.48 |
| State withholding | $41.34 | $29.16 |
| Post-tax income | $801.36 | $591.04 |
| Indemnity claim payment | $0.00 | $229.32 |
| Take-home pay | $801.36 | $820.36 |
| Weekly difference | — | +$19.00 |
+$19.00Per week · employee
More take-home pay in the same paycheck, about $988 a year, plus a care suite at no copay for the whole family.
$21.18Per week · employer
Employer FICA recovered on the pre-tax premium (7.65% × $276.92), about $1,101.59 a year for each enrolled employee.
Claim payments in excess of an employee's annual out-of-pocket medical expenses may be taxable. Members have free tax advice to help.
Savings calculator
See what your company could recover
Based on the paycheck example: $1,101.59 in employer FICA and $988 in employee take-home gain per enrolled employee per year, at 95% enrollment.
Enrolled employees (95%)48
Estimated employer FICA recovered / year$52,876
Combined employee take-home gain / year$47,424
Illustrative only. Your census analysis replaces these with figures for your workforce.
Plan design
A mixed workforce still nets out
Some employees enroll in the Section 125 qualified plan; others are covered on a direct-bill, non-qualified basis. Enter your mix to see the net.
Qualified plan (Section 125)
Employee pays the premium pre-tax through payroll
- Lowers each employee's taxable income
- Reduces the employer's payroll tax base
- No direct premium cost to the employer
Non-qualified plan
Employer pays the premium directly, billed monthly
- Covers employees who don't qualify for the 125 plan
- About $13 a month per employee
- No payroll tax deduction is generated
Net impact to employer
Qualified bucket recovery+$44,064
Non-qualified bucket cost−$1,500
Net per year+$42,564
Illustrative only; not tax, legal or actuarial advice. Results vary by state, plan design and census.
What employees receive
Care at a $0.00 copay, for the whole family
Most services extend to the spouse and up to eight dependents. Virtual care is delivered through Lyric.
Virtual urgent care
24/7/365 by phone or video with U.S.-licensed physicians.
Virtual primary care
A dedicated physician for routine and ongoing conditions.
Behavioral health
Therapy, counseling, psychiatry and medication management.
Virtual dermatology
Board-certified dermatologists for skin, hair and nail concerns.
Message a specialist
Direct questions to 13 specialist types.
Prescription benefit
400+ formulary medications at $0, retail or home delivery.
Labs and screening
Basic lab screenings annually and health risk assessments.
Tax advisory
Unlimited plan tax questions with Brennan Manna & Diamond.
Schedule of benefits
| Benefit | Plan 1 | Plan 2 | Plan 3 | Plan 4 | Payable |
|---|---|---|---|---|---|
| Hospital admission | $1,325 | $1,000 | $750 | $500 | 1 day / year |
| Daily hospital confinement | $100 | $100 | $100 | $100 | 30 days / year |
| Emergency room | $500 | $500 | $500 | $500 | 1 / year |
| Ambulance | $1,325 | $1,000 | $750 | $500 | 1 / year |
| Monthly health screening | $1,325 | $1,000 | $750 | $500 | 1 / month |
| Monthly premium | $1,600 | $1,200 | $900 | $600 | pre-tax |
Fixed payments are made when an eligible claim is filed. Payment amounts are individualized per employee. Policy forms HIP-30000P & HIP-30000R-HSI.
Who each benefit covers
| Service | Dependent ages |
|---|---|
| Virtual urgent care | 2 – 26 |
| Virtual primary care | 2 – 26 |
| Labs and genomic testing | 2 – 26 |
| Virtual behavioral health | 12 – 26 |
| Virtual dermatology | Newborn – 26 |
| Ask a specialist | Newborn – 26 |
| Pharmacy | Newborn – 26 |
| Hospital indemnity | Employee only |
Each service covers the employee, spouse and up to 8 dependents unless noted.
Who stands behind it
Institutions built to be examined
Crum & Forster
United States Fire Insurance Company, rated A+ (Superior) by AM Best. Fully insured: the employer never funds or pays a claim.
A Bain Capital Insurance portfolio company
Plan administration, enrollment, payroll analysis and a dedicated bilingual member service line.
Lyric
A national network of licensed, board-certified physicians and master-level therapists, 24/7/365.
Brennan Manna & Diamond
Free, unlimited tax advice for plan members on indemnity plan questions, through the BMD Gateway.
Implementation
Three steps from first call to activated benefits
Most employers move from initial conversation to live enrollment in a matter of weeks, with our team handling the paperwork.
We review your census
Share basic payroll and headcount information. We model your projected savings before you commit to anything.
Employees enroll
Eligible employees whose net pay rises are enrolled through a simple process, with the option to opt out and no disruption to current coverage.
Savings begin
Once active, pre-tax contributions start reducing FICA costs and employees gain access to their supplemental benefits.
Questions
Frequently asked questions
What is a Section 125 supplemental plan?
A Section 125 (cafeteria) plan lets employees pay for certain benefits with pre-tax dollars. A supplemental plan adds coverage on top of your major medical plan while reducing FICA exposure for employer and employee.
Does this replace our current health insurance?
No. Oak125 stacks on top of your existing major medical coverage and broker relationship. You do not switch carriers.
How much can our company save?
In our weekly example, $21.18 per enrolled employee per week in employer FICA, about $1,100 a year. Your census analysis gives the figure for your workforce.
Is participation mandatory for employees?
No. The plan is 100% voluntary. Qualifying employees can be auto-enrolled for convenience and may opt out at any time.
How long does implementation take?
After we review your census and model the savings, most employers reach active enrollment within a few weeks.
Who handles claims and member questions?
A licensed administrator handles claims and a bilingual member service line; Oak Insurance Group remains your point of contact.
The next step
See your company's numbers before you decide anything
Share your employee count and we'll send a no-obligation estimate of what a Section 125 supplemental plan could save your business. Oak125 is designed for employers with 20 or more employees.
(352) 720-0088contact@oakinsurancegroup.comOffices in Vero Beach, Florida · Midway, Utah