Everything you need to know.

IRS Section 213(d) is the part of the tax code that defines qualified medical expenses for tax purposes. These expenses may count toward an itemized medical deduction and can also be paid through pre-tax benefit arrangements such as a Health Savings Account (HSA), Flexible Spending Account (FSA), or Health Reimbursement Arrangement (HRA). This FAQ explains how Section 213(d) works, what expenses may qualify, and why it matters for employers looking to reduce taxes and employees looking to increase net pay.

IRS Section 125 is the part of the U.S. tax code that allows employees to pay for certain employer-sponsored benefits with pre-tax dollars through a cafeteria plan.

In 2025 the tri-agency final rule (IRS, DOL, HHS) tightened and clarified how fixed indemnity/excepted benefits are defined and regulated, aiming to better distinguish them from comprehensive ACA-compliant coverage and reduce consumer confusion. It also updates rules for when these limited or supplemental plans qualify as “excepted benefits,” with the broader goal of steering consumers toward more comprehensive, higher-quality health coverage.

We are backed by one of the largest healthcare management programs in the United tates. We ensure compliance, support HR in engaging employees, and deliver seamless, on-time claims, billing, and reporting.

See our Quick Savings Calculator for an estimate using the average employee savings of $650 per employee per years.

No. We coordinate directly with your existing payroll provider to implement the 213(d) structure. Your HR team doesn't need to change anything. Employees keep their current benefits. The only thing that changes is how a portion of compensation is categorized at the payroll level.

Most implementations complete within 30–60 days from the time you decide to move forward. The process includes a free analysis, payroll provider coordination, plan documentation, and employee enrollment. There's no disruption to payroll during the transition.

Yes, once the program is adminsitered employees will see the savings on their next paycheck. The average employee sees an increase of $650 or more per year.

No. Your existing health insurance, dental, vision, and any other benefits remain completely unchanged. This is a payroll-level arrangement, not a new benefit plan. You simply opt in to have qualifying medical expenses treated as pre-tax, nothing else changes.

Yes, the underlying tax treatment is established law under the Internal Revenue Code. In 2025 the tri-agency final rule (IRS, DOL, HHS) tightened and clarified how fixed indemnity/excepted benefits are defined and regulated, aiming to better distinguish them from comprehensive ACA-compliant coverage and reduce consumer confusion. It also updates rules for when these limited or supplemental plans qualify as “excepted benefits,” with the broader goal of steering consumers toward more comprehensive, higher-quality health coverage.