11 Questions to Ask a Vendor Selling Payroll Tax Savings
Eleven questions. Three do most of the work: who wrote your legal opinion and can I read it today, what does a caregiver receive in a month when nobody gets sick, and if the IRS examines this, who defends it. A vendor running a real plan answers each in a sentence. A scheme changes the subject.
Go read IRS Chief Counsel memo 202323006, dated 9 May 2023. It is free and it is short.
The memo walks through an employer whose workers pushed $1,200 a month through a cafeteria plan and got a $1,000 wellness payment back every month, sick or not. The IRS called that $1,000 wages. Tax it. Withhold on it.
The memo did not clear the market out. Steptoe wrote in June 2026 that promoters are still selling that same structure, still showing the same before-and-after paycheck illustrations, three years after the guidance landed. So you get cold calls. Some are selling a plan that holds up, some are selling the thing the IRS already wrote up, and both use identical vocabulary. Section 125. Wellness. Zero net employer cost.
Is this a gimmick the IRS is coming after?
Section 125 has been in the tax code since 1978. Regulators did not object to cafeteria plans. They objected to one specific design, the one where the same dollar gets excluded from income twice, and memo 202323006 is the written record of exactly that arrangement.
1. Who wrote your legal opinion, and can I read it today?
A named firm, on letterhead, unredacted. For the Unify Wellness Plan, CBIZ wrote the CPA opinion and HitesmanLaw wrote the legal assurance, and both go to your accountant before you sign anything. A vendor who summarizes an opinion instead of sending it has answered you.
2. What does a caregiver get in a month when nobody is sick?
Real care they can use. Telehealth visits, mental health support, prescription access. A plan whose only visible output is a payment flowing back to the employee is precisely the structure the IRS wrote up in the 2023 memo.
3. If this gets examined, who defends it and who pays?
Ask before you sign. Steptoe puts the exposure at up to 20% of the underpaid tax, and it lands on the employer.
What are the other eight questions?
Shorter, and the answers should come back immediately.
| Ask this | What a straight answer sounds like |
|---|---|
| Who administers the plan? | A named third-party administrator, not the person selling to you. |
| What is the monthly fee per participating employee? | A flat number, netted out before any savings figure reaches you. |
| Does the caregiver pay anything out of pocket? | No. The election comes out of wages already earned. |
| What does enrollment cost my office in hours? | Hours, not weeks. The vendor runs the caregiver meetings. |
| Who runs nondiscrimination testing, and how often? | The administrator, every year, results sent to you. |
| What happens when a caregiver quits in March? | The election stops with the last paycheck. No clawback. |
| Can my own CPA read the plan documents first? | Yes, today, in full. |
| What is your savings estimate built on? | A range from headcount and wages, labeled an estimate. |
That last one matters. A vendor who needs a stack of paperwork before they will say a number is stalling, and a vendor who hands you a guaranteed figure before knowing your roster is worse. The longer version sits on our page about whether this plan is legit.
I already ran this and I could not afford it
You priced two things: a raise, and a group health plan. Both need money you do not have, and on a 7 to 10 percent net margin neither one is close.
That is the whole margin. A Section 125 wellness plan is a different funding question, because it redirects employer payroll tax you already pay instead of asking for new money, which is covered in the full guide for home care agencies. That is why it survives arithmetic a raise does not.
Where this does not work
The savings come out of payroll tax the agency already pays, so a caregiver working eight hours a week does not generate much of anything to redirect. Participation is voluntary, which means the arithmetic only counts caregivers who enroll. Expect some who will not. A roster of very low-hour staff can land on a number too thin to be worth the administration.
Hours change the size of the result. They do not decide eligibility, which is covered in what part-time caregivers can be offered.
What would this look like at your agency?
Two inputs answer it. How many caregivers you run, and roughly what they earn, which is the whole ask and it stays small on purpose.
The estimator takes those two numbers and shows three things: what your agency currently pays in employer payroll tax, what turnover at the industry median is costing you, and what could be redirected into caregiver benefits instead. Thirty seconds. No signup.
On scale, UnifyWell's published example nets an employer roughly $640 per participating employee per year on a $44,000 earner, after the monthly administration fee, and caregiver wages sit below that. Across our own proposals the figure has landed between $300 and $900 per participating employee per year. That is a range, not a quote. Which of your caregivers qualify, and what actually lands on their check, only your own numbers can answer. Have your own CPA read the plan documents first.
Open the estimator
Headcount and average wage. Thirty seconds later you have a number worth carrying into a vendor call.
Open the estimatorFree. No signup, no documents to send.
Home Care Wellness is not a law firm, an accounting firm, or an insurance company, and nothing on this page should be read as legal or tax advice. The Unify Wellness Plan is a Section 125 wellness benefit administered by UnifyWell and ACA Solutions. It is not health insurance. Savings figures are estimates and depend on your payroll, wages and participation. Review the plan documents with your own CPA or counsel before adopting any plan.
