In today’s competitive job market, small and medium-sized businesses need to provide greater value via employee perks without raising prices. What is the challenge? Finding a balance between good coverage and low costs. The Lumara Plan fixes this with a unique structure that translates tax savings into genuine benefits, and it doesn’t cost the business anything more.
The Lumara Plan lets companies lower their payroll taxes while giving workers better healthcare reimbursements. It does this by using a Section 125 flexible spending plan and adding a Self-Insured Medical Reimbursement Plan (SIMRP). It’s not just clever, but it also changes things.
How to Make the Most of a Section 125 Flexible Spending Plan
The Lumara Plan’s main feature is a Section 125 flexible spending plan that lets workers use their pre-tax income to pay for certain benefits. This arrangement decreases their taxable income, which saves both the employee and the business money right away.
When workers take part in pre-tax deductions under Section 125, employers cut down on their payments to:
- Social Security by 6.2%
- Medicare (1.45%)
- Federal Unemployment Tax (FUTA)
- State unemployment programs, if they exist
These savings may build up rapidly, particularly for businesses with ten or more workers. But instead of merely keeping the money, the Lumara Plan reinvests it in better benefits for the employee in a smart way.
How the Lumara Plan Helps Employers Without Costing Them Anything
The Lumara Plan is different from standard flexible spending plans since they frequently depend on employee payments and come with “use-it-or-lose-it” hazards. Instead, the Lumara Plan establishes a long-term, employer-funded medical reimbursement approach.
This is how:
- The Section 125 plan changes some of your post-tax salary into a pre-tax benefit.
- The business will save money on payroll taxes right away with this salary change.
- Then, these funds go toward a Self-Insured Medical Reimbursement Plan (SIMRP) that pays workers back for appropriate medical costs without taxing them.
- Employees get more money in their paychecks, while businesses keep or even lower the amount they spend on benefits.
This means that many firms may get tax-free medical reimbursements of more than $1,200 per employee per year, yet their operational expenses don’t go up.
Providing a Complete Package of Employee Benefits—Smarter
Many small company owners think that a comprehensive employee benefits package has to be pricey. The Lumara Plan shows that this is not the case.
The Lumara Plan employs payroll tax technique to provide employees the same advantages that major businesses do, but at no extra expense.
Some important parts are:
- Structure of the Section 125 flexible spending plan
- Integration of current insurance payments into a premium-only plan (POP)
- Self-Insured Medical Reimbursement Plan (SIMRP)
- Full help for compliance, such as writing up plans, testing for prejudice, and reporting
- Ongoing training for employees and help with claims
This makes it possible for employers to provide tax-free reimbursements for medical costs that employees pay for themselves, such as copays, medications, dentist appointments, and eye care.
The Lumara Advantage: More Than Just a Plan
A lot of third-party administrators have cafeteria programs. The Lumara Plan is more than simply a piece of paper; it’s a complete solution. What makes it different?
1. Complete Management of Payroll and Compliance
The Lumara Plan is designed to work well with payroll systems that are already in place. All paperwork, deductions, and reimbursements are done according to IRS Section 125 guidelines and ERISA compliance requirements.
2. No Learning Curve for HR Teams
Employers don’t need to know how to read complicated tax regulations or procedures about how to be paid back. Lumara takes care of plan design, implementation, compliance testing, and yearly filings, which frees up internal staff.
3. Made Just for the Size and Goals of the Employer
Lumara’s design works with any number of workers, from 10 to 250, and takes into account things like the demographics of the workforce, income levels, and insurance plans to get the most savings possible.
Real Results: What Employers Can Expect
Most of the time, employers that use the Lumara Plan see results in the first payroll cycle. For instance:
- A firm with 30 employees and an average salary of $45,000 might save more than $35,000 a year on payroll taxes.
- Each employee might get up to $1,200 back in taxes each year.
- The company doesn’t pay anything more for salaries or insurance that is already in the budget.
The Lumara Plan works for businesses in any field, including healthcare, professional services, construction, education, and retail. The Lumara Plan may help the firm save money if it pays payroll taxes and offers health insurance.
A Better Way to Give Pre-Tax Benefits
Flexible spending accounts (FSAs) that are traditional typically don’t deliver as much value as they could:
- They depend on money from employees.
- They limit how much they will pay back.
- They risk losing employee funds
- They make things harder for administrators.
The Lumara Plan doesn’t have any of these problems at all. Employers decide how to pay for things, and workers don’t have to pay taxes on the money they get back.
The Lumara Plan is not linked to high-deductible health plans as Health Savings Accounts (HSAs) are. It works with the insurance plans that are already in place, so you don’t have to alter your plan.
Helping Employers Compete in a Competitive Job Market
Small companies need to provide more than just a wage if they want to hire people today. People want value in their jobs, particularly in healthcare.
- Employers may keep more employees without having to pay them more by giving a full benefits package via the Lumara Plan.
- Standout perks may help you hire better people.
- Show that you care about your employees’ health and financial stability.
- Make people happier and more engaged at work
Everything is done without affecting present operations, starting new vendor relationships, or raising costs.
Who Should Use the Lumara Plan?
The Lumara Plan is perfect for:
- Employers with 5 to 500 W-2 workers
- Businesses that sell group health insurance
- Companies who want to minimize their tax bill without decreasing their pay
- Companies who seek to improve perks without going over budget
The Lumara Plan may turn hidden savings into apparent benefits without bothering HR if the firm is already paying payroll taxes and providing health insurance.
Conclusion: More Worth. No Extra Charge.
The Lumara Plan doesn’t cost more; it’s just a better approach to provide value. The plan is built on a compliant Section 125 flexible spending plan and a SIMRP stacked for reimbursement. It gives both the company and the employee demonstrable benefits.
Instead than raising the cost of benefits, Lumara uses existing tax responsibilities to generate value that workers can see and enjoy every single paycheck.
Want to change your benefits approach without spending more money?
Start the Lumara Plan now and find tax savings that you didn’t know you had. Use these savings to provide your employees better care.
