CLIENT RESOURCES
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If you’re still curious about any of the programs or resources email us.
EMPLOYEE FREQUENTLY ASKED QUESTIONS ABOUT THE SIMRP
So you just got your first paycheck after the Self-Insured Medical Reimbursement Benefit Program was put in place, and you might be wondering, “What are all these new deductions???” Many employees have questions about why their paystubs look different and what all the new deductions mean. Below are some frequently asked questions in regard to the SIMRP that may help answer these questions. However, should you need any additional information or clarification, please do not hesitate to contact Citadel Benefits Group at 256-826-5674.
PAYROLL CODES YOU MAY SEE ADDED TO YOUR CHECK:
PHW
Paradigm Health & Wellness – This is the Pre-tax deduction for the Wellness Program.
SIMRP
Self-Insured Medical Reimbursement Program – This is the reimbursement of the PHW Pre-tax deduction. The pre-tax deduction and reimbursement is what is creating your “tax savings allotment” that you were able to spend on insurance benefits.
SIMRP EMPLOYEE FAQS
Will my gross income change when I enroll in the program?
No, this program will not change your gross income. It does reduce your taxable income, which is reflected on your W2 at the end of the year.
Will my net pay or “take home” pay be lower?
No, your net take home pay will not be lower. (Unless you choose to spend more than the allotment given to you.) If you are experiencing a take home pay decrease, please email [email protected] immediately and we will assist in getting that resolved.
Will my pay stub change?
Yes, you will notice new deductions and a SIMRP reimbursement. These changes will lower your tax withholdings and the amount you pay in FICA and state taxes. This is where we are creating your “tax savings”. The new deductions for your insurance products will be equal to or less than the amount of taxes you are no longer having to pay due to the tax savings created by the SIMRP reimbursement.
Will lowering my tax deductions from my check cause me to pay more in federal income taxes at the end of the year?
No, by lowering your taxable income, you have lowered the amount you owe in taxes. Your tax withholdings will drop as a result as well.
I noticed I am no longer paying federal withholding tax. Is this going to be an issue?
Below a certain taxable income point, the Federal Government no longer withholds taxes. When you lower your taxable income through enrollment in a Section 125 plan, you may hit that lower amount.
If I wish to increase my federal withholding, can I?
Yes, by changing the number of deductions on your W4 or by electing to have additional withholding, but it is not necessary, your income tax requirements will decrease. If you do decide to change your withholdings, please let us know by emailing [email protected]
Will this change my tax refund I get next year?
It will not affect it in a negative way. We are lowering your taxable income which in turn lowers how much you owe in taxes. However much you “overpay the IRS” you will still get back. We are only dealing in the actual amount you owe the government. For specific questions please contact your tax advisor.
MISCELLANEOUS FAQS
I noticed my FICA tax dropped; will this affect my social security payments when I become eligible?
Depending on how much you have already contributed, it may lower your monthly amount. The savings you generate through participation will more than offset that reduction. If you have maxed out your 40 quarters, your benefits will not change. Most employees see little to no change. (Ask your agent for the “Social Security Letter” for a detailed explanation)
What products can be used with the tax savings (allotment) dollars?
Approved insurance products can be purchased with your tax savings. Your representative will provide you with the information for all the products available.
Is this program legal?
Yes, this is a tax qualified Self-Insured Medical Reimbursement Program with a wellness focus that uses tax advantage provisions under the Internal revenue Service codes “Section 125 Cafeteria Plan and coeds 105, 106, and 213(d)” and ACA wellness rules.
Are there any requirements for me to stay compliant on this program?
Yes, you must earn 100 points per year in the Paradigm Wellness Program. Please see the Paradigm Health Activities Flyer provided to your employer for more information on how to earn those points. Most general medical provider visits earn you 25pts, so earning the 100 points is really simple. You just need to remember to log into your personal wellness dashboard and make note of your health activities. Please note that failure to earn 100 pts per year could result in a loss of benefits.
Click on this video to see how it works!