Tax-Advantaged Health Care

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Project Description

A small, fifteen person company was seeking a health care program that would maximize benefits while reducing costs.


The company needed specific recommendations that would fit their budget constraints and serve the health care needs of all employees. They needed benefits expertise and a careful review of the company’s existing plan.


EBA began its engagement scrubbing the census of the employee base, which showed a dominant male population – with no dependents. EBA uncovered the obvious analysis: that there was not a great need for maternity or family planning benefits. (A key fact which was missed by the previous insurance broker.) Thus reducing benefits in the targeted areas would lower premiums.

To accommodate the one female employee, EBA recommended that the client create a tax-advantaged section 105 replace account. Savings from the plan change were used to fund an HRA which would be used to pay specified medical expenses.  The new design emphasized deductible and co-insurance payments versus co-pays. In addition to a deductible/co-insurance design for maternity/family planning benefits, benefits changed for the specialist, mental health, substance abuse, ophthalmology and urgent care.


Employee Benefit Advisors is proud to spot-light our work in the small employer market. Most people assume little, other than plan selection, can achieve savings. Careful analysis by knowledgeable and experienced brokers (like EBS) can lead to significant savings. Our work helped the client and resulted in:

  • The section 105 account allowed for self-funding of that portion of the design change, so that the employees’ out-of-pocket costs were equal to the higher-priced benefit plan.
  • Under EBA’s recommendations, the choice to stay with the same carrier, with the above modifications, saved $20,000 in the first year (less than the 14% renewal).
  • The client was able to maintain the plan for three years, before regulations caused the carrier to alter it, gaining a total savings of $60,000 over a 3-year period.
  • Claims against the tax-advantaged account were zero dollars over the three years.



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