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What Exactly is Section 125 Plan?

A section 125 plan is a benefit system recognized by the IRS that allows employees to contribute toward eligible benefits. By participating in the plan, both employers and employees can optimize their benefits structure, putting more money back into the business and the employee’s paycheck. When combined with Harmoni125’s PCMP and SIMRP, the section 125 health plan becomes much more powerful. It transforms from a simple tax savings tool into a complete health and financial wellness system that protects families and boosts company performance, all without changing existing insurance coverage.

With Harmoni125:

  • Employers save an average of $1,100 per year per W2 employee.
  • Healthcare costs are reduced by 5-10% over time
  • Employees gain access to advanced medical and mental health services, at no cost.
This is why thousands of employees nationwide are already enrolled in Harmoni125, enjoying more coverage and greater peace of mind.

Who Can Benefit From a Section 125 Plan?

Any business with W2 employees can establish a Section 125 health plan. It’s ideal for small to mid-sized companies seeking to offer enhanced benefits without increasing costs.

Eligible employers include:

  • Corporations and LLCs
  • Partnerships
  • Government entities
  • Nonprofits

While sole proprietors or partners can’t directly participate in the plan, their employees can, helping business owners strengthen loyalty, reduce turnover, and improve retention through meaningful, tax-advantaged benefits.

With Harmoni125, the entire process of opening, managing, and maintaining the plan is fully automated, requiring no additional administrative burden for the employer.

Eligibility for Section 125 participation generally extends to all full-time W2 employees. Employers may set eligibility waiting periods or participation guidelines as long as they comply with IRS rules.

Under Harmoni125, eligibility also includes spouses and dependents, ensuring your entire family benefits from the same level of care and support. Every employee enrolled receives access to life insurance, telemedicine, mental health programs, and RX coverage at no copay.

It’s a plan designed for modern families and forward-thinking employers alike.

Benefits of Section 125 for Employers and Employees

Harmoni125 was created to bring a measurable impact to both sides, businesses and their people.

Employer Benefits

  • Save ~$1,100 per W2 employee per year
  • 5-10% reduction in healthcare costs
  • Zero out-of-pocket costs to implement
  • Reduced healthcare claims (avg. $1,400 savings over 3 years)
  • 30-45 day implementation timeline
  • Boosts employee retention, loyalty, and productivity
  • Strengthens company culture without extra spending

Employee Benefits

  • No change in take-home pay
  • $0 copay access to 24/7 Telemedicine & Virtual Care
  • Mental health, addiction, and counseling support
  • Family coverage with 12 annual care visits
  • Group Term Life Insurance ($60–$100/month value)
  • Mayo Clinic wellness tools & dashboard
  • RX coverage with no copays
  • Discounts on vision, dental, and prescriptions
  • In-person urgent care access

All benefits extend to spouses and dependents, reinforcing a family-first workplace model.

By integrating these rich benefits with the Section 125 wellness plan structure, Harmoni125 empowers employees to live healthier and employers to save more, all without disrupting current plans.

What Expenses Can a Section 125 Plan Cover?

Traditional Section 125 plans can cover medical premiums, dental care, and certain dependent expenses. But Harmoni125 expands on this dramatically by adding preventive and lifestyle health services under the section 125 health care plan umbrella.

Covered expenses and services include:

  • Primary care and urgent care visits
  • Mental health and counseling sessions
  • Preventive screenings and diagnostics
  • Prescription drug coverage (no copays)
  • Virtual doctor consultations and telehealth
  • Addiction recovery and wellness programs
  • Nutrition and stress management
  • Life, disability, and critical illness coverage

All these services are available at $0 copay, ensuring both the health plan for health care workers and their family have consistent, affordable access to care.

Setting Up a Section 125 Plan

Implementing Harmoni125 is simple, seamless, and fast. The process typically takes 30-45 days from start to finish.

Step-by-Step Overview:

  • 1. Initial Consultation: Discuss company size, workforce structure, and goals.
  • 2. Custom Plan Design: The Harmoni Care team builds a compliant, automated plan tailored to your business.
  • 3. Implementation: Your Harmoni125 plan launches with no disruption to your current insurance.
  • 4. Employee Enrollment: Employees are educated about the benefits and how to access them.
  • 5. Ongoing Management: Compliance, documentation, and reporting are automated year-round
No paperwork, no confusion, just measurable results and happy employees.

What Is Included in a Section 125 Plan?

A Harmoni125 plan includes three powerful components that work together to create unmatched results:
  • 1. Preventative Care Management Plan (PCMP): Our section 125 wellness plan offers ongoing preventive and wellness care, mental health support, and lifestyle programs.
  • 2. Self Insured Medical Reimbursement Plan (SIMRP): Provides tax-free reimbursements for medical and wellness expenses, including virtual care and family services.

Together, one of the most compliant, automated, and benefit-rich Section 125-based systems is created in the market today.

Building a Healthier, Happier Workforce with Section 125

The section 125 pre-tax benefits aren’t just about tax savings; it’s about transforming how small and mid-sized businesses care for their people. When powered by Harmoni125, it becomes a high-impact solution that blends compliance, cost control, and compassion into one seamless system.

With no out-of-pocket cost, immediate savings of up to $1,100 per W2 employee, and all-inclusive $0 copay healthcare coverage, it’s one of the smartest benefits programs available today.

Invest in your team’s well-being and your business’s future, with Harmoni125.

Book your 10-minute consultation today to see how easily you can implement the section 125 plan that’s redefining workplace wellness.

Frequently Asked Questions

It lowers payroll taxes for employers and boosts employee take-home pay through pre-tax savings.

It governs cafeteria plans, allowing employees to choose pre-tax benefits.

No, HSAs are savings accounts, while Section 125 covers multiple benefit types under one plan.

All full-time W2 employees, along with their spouses and dependents, can participate.

Plans must follow IRS renewal and compliance requirements annually to remain valid.

Get a Free Proposal

We’ll analyze your company, estimate your annual savings, and walk you through how this plan works for your team. No hard pitch—just real numbers.