Why the CHAMP Plan Works—From a Legal and Practical Standpoint

As a business owner or corporate executive, you may have encountered brokers or companies promoting various wellness and healthcare reimbursement arrangements. These plans often promise tax savings for both employers and employees, increased take-home pay for workers, and access to virtual medical benefits.

Naturally, you may be asking: Is this too good to be true?

When it comes to The CHAMP Plan™, presented by The Policy Shop, the answer is a resounding no. The CHAMP Plan is compliant, structured, and legally sound—offering real financial advantages while meeting all regulatory requirements.

Understanding the key differences between compliant programs and non-compliant “double-dip” arrangements is crucial. Once you know what sets The CHAMP Plan, presented by The Policy Shop apart, you can confidently decide if it’s the right solution for your company.

Beware of Non-Compliant “Wellness Plan” Arrangements

Some plans have drawn IRS scrutiny due to improper tax treatments—specifically the “double dip” strategy. In these arrangements:

1. Employees pay for their share of an employer health plan through pre-tax salary deductions.
2. The plan then reimburses employees for those same contributions—purportedly on a tax-free basis—bringing their take-home pay back to pre-deduction levels.

The IRS has ruled that these reimbursements are taxable wages, subject to income and employment taxes. This is outlined in Revenue Ruling 2002-3 and reinforced by subsequent IRS memos addressing similar schemes.

How Is the CHAMP Plan™ Different?

Unlike questionable wellness programs, The CHAMP Plan, presented by The Policy Shop, is fully compliant and structured to eliminate double-dipping concerns.

How the CHAMP Plan Works

The CHAMP Plan™ is a single employer-sponsored plan that consists of two key components:

1. The Pre-Tax Champion Health Minimum Essential Coverage Plan (MEC Plan)
2. The Post-Tax Champion Health Population Management Plan

Each component operates within IRS guidelines and provides distinct benefits to employees and employers alike.

MEC Plan (Pre-Tax Component)

 The Champion Health MEC Plan is structured as a pre-tax benefit. Employees contribute through pre-tax payroll deductions under IRC Section 125, opting for qualified health benefits instead of cash compensation.

Key Features of the MEC Plan:

• Covers in-person doctor visits, urgent care, prescriptions, and preventive services.
• Benefits are paid directly to providers—ensuring compliance.
• No tax implications for employees or employers.

Health Population Management Plan (Post-Tax Component)

The Health Population Management Plan is structured as a post-tax benefit. Employees make post-tax payroll deductions, ensuring compliance with IRS guidelines.

How It Works:

• Employees complete a health risk assessment, generating a CPT code.
• The assessment determines future health management needs.
• Employees complete prescribed health management tasks, generating additional CPT codes.
• Claims payments are made directly to the employee—excludable from gross income under Section 104(a)(3).

By ensuring that premium payments for the Health Population Management Plan are taxed upfront, The CHAMP Plan eliminates any risk of non-compliance while delivering real financial and healthcare benefits to employees.

What Makes the CHAMP Plan™ Unique?

No “Double-Dipping” – 100% IRS Compliant

Unlike questionable wellness programs, The CHAMP Plan, presented by The Policy Shop, is fully compliant because:

• Pre-tax and post-tax components are separate and structured properly.
• Post-tax contributions ensure that reimbursements are not taxable.
• All claims payments align with IRS guidelines under Section 104(a)(3).

With The CHAMP Plan™, presented by The Policy Shop, employers can confidently enhance their benefits package, increase employee take-home pay, and reduce overall healthcare costs—all while remaining compliant.

The CHAMP Plan™—A Smarter Solution for Your Business

If you’re looking for a cost-effective, IRS-compliant, and employee-friendly benefits solution, The CHAMP Plan, presented by The Policy Shop, is the answer.

• Boost employee retention with valuable healthcare benefits.
• Reduce payroll taxes while staying compliant.
• Increase employee take-home pay—a win-win for everyone.

To learn more about The CHAMP Plan™ and how it can benefit your business, visit The Policy Shop today!