My work is offering a new benefit for 2019 through OpHealth, that I can't seem to figure out how I feel about. If anyone has experience, I'd love to hear about it. I'll be meeting with a representative next week, so questions are also welcome.
The program:
I would pay a premium of my own choice between $500 and $2000 per month. This is (supposedly) pre-tax and pre-FICA money. If I do monthly online assessments, I'll receive a benefit payment of 85% of the premium, (supposedly) post-tax. For example, every month I would have $1000 taken out pre-tax and then receive $850 post-tax, a 15% rate.
The savings come from the pre- to post- tax conversion. I'm in the 22% tax bracket, and FICA adds another 7.65%. If I pay tax on the $1000 I would have an in-pocket after-tax value of $703.50, as opposed to $850 through the program. Even when I fall down into the 12% bracket, taxes would be 19.65% vs the 15% of the wellness program.
As a downside, I have to make sure to jump through the assessment hoops every month for it to work out in my favor. If I don't, you lose the monthly benefit $$ and then are simply out the premium.
Currently I have the following questions for the rep to answer/prove:
- Are the premiums legally excluded from both federal income and FICA taxes? (Section 125 plan, I think?)
- Are the payout benefits fully excluded from all federal taxes?
- Do I have to buy anything (eg a gym membership) to get the benefit?
- Can you show me what the online assessment will be?
Have you ever been a part of a plan like this? Is there any reason you can think of that I should not do this program? Any other questions I should grill the rep on?