Municipalities, County Governments, Public School Districts & Authorities Save $138/Yr Per Employee.
Education, Municipal & Institutional · Plain-English Payroll Tax Savings
Cities, counties, public school districts, transit authorities, and water/utility authorities whose employees participate in Social Security have nearly 90% full-time health plan enrollment. Adding EHP's $0-copay preventive and virtual care benefit recovers $138 per participating employee every year for your general fund.
How this works in plain English: Participating full-time employees elect $150/mo pre-tax for EHP’s preventive & virtual care plan (a ~23.9% tax discount reducing net paycheck cost to ~$114.17/mo; an employee who does not use the care takes home less). Your business stops paying the 7.65% employer FICA tax on that election ($138/yr gross FICA reduction per participant; EHP’s program cost is shown alongside the FICA reduction in your Week 1 census analysis). See full IRS & CPA details below ↓
Municipalities & Public Authorities · At a Glance
How It Works for Municipalities & Public Authorities.
No tax degree required · Three simple steps
Keep Your Current Insurance
You add EHP’s $0-copay virtual primary/urgent care, mental health, and Rx program alongside your existing health plan. No carrier or doctor changes.
Full-Time Staff Elect Pre-Tax
Participating full-time W-2 staff elect $150/mo pre-tax for EHP care: ~$35.84/mo ($430/yr) in tax savings lowers their net paycheck cost to ~$114.16/mo (no unsubstantiated cash-back leg).
Gross 7.65% Employer FICA Saved
Your company stops paying the 7.65% employer FICA tax on that $150/mo ($1,800/yr) election ($138/yr gross FICA reduction per employee before any applicable EHP program fee).
Why Municipalities & Public Authorities Are an Ideal Fit.
Three reasons this industry sees strong results
Nearly 90% of Your Full-Time Public Workforce Qualifies
Public works, county/city administration, transit, utility, and school district employees carry the highest full-time health plan participation rates in the country.
Relieve General-Fund Budget Pressure Without Cutting Benefits
Because the program is 100% additive and never alters your underlying public health plan or carrier, finance directors can recover general-fund payroll tax dollars without reopening benefit tiers.
Built for City Council, Board & Public-Audit Transparency
We verify which departments pay full Social Security + Medicare (7.65%) versus Medicare-only (1.45%) on day one, and put every number and legal citation on a single page for your board and auditors.
Quick Reference: Annual Employer Savings by Team Size
| Monthly Benefit Level | 400 Employees | 1,000 Employees | 2,500 Employees | 5,000 Employees |
|---|---|---|---|---|
| $100/mo Benefit | $36,720/yr | $91,800/yr | $229,500/yr | $459,000/yr |
| $150/mo Benefit | $55,080/yr | $137,700/yr | $344,250/yr | $688,500/yr |
| $200/mo Benefit | $73,440/yr | $183,600/yr | $459,000/yr | $918,000/yr |
| $250/mo Benefit | $91,800/yr | $229,500/yr | $573,750/yr | $1,147,500/yr |
For Your CPA, Controller & Tax Counsel: Statutory Verification.
Share this section with your accounting or legal team · IRC §125(d)(1) & §3121(a)(5)(G)
- Section 218 Agreement & Medicare-Only (1.45%) Segmentation
- In states or departments where sworn police/fire or teachers are exempt from the 6.20% OASDI tax and pay only the 1.45% Medicare tax (IRC §3121(u)), we segment those divisions immediately so your feasibility model never overstates FICA savings.
- Collective Bargaining & Civil Service Coordination
- Because the program is voluntary, additive, and does not alter the underlying public health plan, we coordinate clear communications with HR and bargaining unit leadership.
- Tyler Munis / BS&A / Skyward / Workday Payroll Testing
- We test deduction and FICA exclusion codes directly with your municipal or school district payroll software before the first live cycle.
- Same-Day Audit & FOIA-Ready Documentation
- Every document, election record, and payroll register calculation is clean, factual, and ready for public-sector auditors.
1. W-2 Employee (No Owners)
Must be a W-2 employee on your payroll. Independent 1099 contractors, K-1 partners, LLC members, and more-than-2% S-Corp shareholders (plus family members under IRC §318) are excluded by law.
2. Enrolled in Health Insurance
Must be enrolled in qualifying ACA-compliant major medical coverage. EHP’s preventive care benefit sits alongside your medical plan and never replaces it.
3. Full-Time (30+ Hrs / Week)
Must work full-time (30 or more hours per week). Part-time, seasonal, PRN, and casual workers under 30 hours are filtered out before we calculate your savings.
4. Substantiated Care Only
We never use aggressive cash-back or fixed-indemnity schemes rejected by the IRS (CCA 202323006), and we never make false workers’ comp reduction promises (NCCI Rule 2-B-1).
Find Out Exactly What Your Business Can Save in Week One.
Zero Consulting Fee · Multi-Location Ready · No SSNs Needed
You do not have to guess whether your workforce qualifies. Send a simple payroll census (without Social Security numbers) and we will model your exact headcount, filter out ineligible staff, and show you the net dollar result in the first week. If the numbers do not justify setting it up, we will tell you straight up.
Common Questions from Municipalities & Public Authorities.
Straight answers for business owners, HR leaders, and CPAs
What if our sworn police/firefighters or teachers only pay the 1.45% Medicare tax and not the 6.20% Social Security tax?
We check that on day one. Any bargaining unit or employee group that is outside Social Security (OASDI) under your state's Section 218 agreement only generates a 1.45% employer Medicare reduction, which is usually too small on its own. We focus the feasibility model on your public works, county/city administration, support staff, and Section 218-covered employees who pay the full 7.65% FICA rate.
Does Boost Benefits charge the municipality or school district a consulting fee?
No. Boost Benefits charges you nothing. EHP prices its program cost inside the modeled result so your finance director sees the net general-fund impact before committing.
Can our municipal attorney and independent auditors review the statutory basis?
Yes, export our 1-page CFO Statutory Arithmetic Memo directly from the calculator on this page to share with your city/county attorney and external auditors.
Explore Industry Savings Guides
Fine print
No advice, no relationship
Boost Benefits provides employee benefits program design, enrollment, and administration services. It is not a law firm, an accounting firm, an insurance carrier, or a registered investment adviser. Nothing on this site is legal, tax, accounting, actuarial, or investment advice; nothing here is a tax opinion or a covered opinion; and no advisory, fiduciary, or attorney‑client relationship is created by reading this site, by submitting a census, or by contacting us. Boost Benefits does not represent clients before the Internal Revenue Service or any state taxing authority. Consult your own tax counsel and accountant before adopting any arrangement described here.
Figures are illustrations, not projections
Every dollar figure on this site is an arithmetic illustration computed from stated inputs. None is an average, an estimate of your result, a projection, a forecast, a guarantee, or a representation of results achieved by any client. Each assumes: 2026 federal rates; a combined employer FICA rate of 7.65%, being 6.20% Social Security on wages up to the $184,500 taxable maximum plus 1.45% Medicare with no cap; for employee-side and combined figures, a marginal rate of 23.90%, being 7.65% FICA plus a 12% federal bracket plus Michigan’s 4.25%, for a single filer earning approximately $62,000 in 2026 and taking the standard deduction; an employee whose wages remain below the Social Security taxable maximum for the full year; full-year participation with no mid-year election change; and an election properly made under a validly adopted written plan. Change any input and the figure changes, not proportionally, since the 6.20% component stops above the taxable maximum and marginal income tax rates step.
What is not included
No figure on this site assumes any reduction in federal unemployment tax. Although 26 U.S.C. §3306(b)(5)(G) parallels the FICA exclusion, FUTA applies only to the first $7,000 of an employee’s annual wages under §3306(b)(1), so the practical benefit is nil for most employees. No figure assumes any reduction in state unemployment tax; state taxable wage bases are generally low relative to typical wages, and treatment varies by state. No figure assumes any reduction in workers’ compensation premium; under NCCI Basic Manual Rule 2‑B‑1, employee‑authorized Section 125 salary reductions are included in payroll for premium purposes in most states, and independent‑bureau states may differ. The additional 0.9% Medicare tax on wages above $200,000, or $250,000 for joint filers, is an employee‑only tax and is excluded.
Indemnity-type benefits
Accident, critical illness, and hospital indemnity coverages pay fixed amounts on the occurrence of an event rather than reimbursing expenses actually incurred. Where premiums for such coverage are paid with pre-tax dollars through a cafeteria plan, benefit payments are generally includible in the employee’s gross income; this is the same analysis the Internal Revenue Service applied in CCA 201622031, CCA 201703013, and CCA 202323006. Whether any particular coverage in a selected package is funded pre-tax or post-tax is a plan-design decision, and you should obtain that answer in writing before enrolling employees.
Effects on employees
A salary reduction election reduces the employee’s taxable wages and therefore the employee’s withholding and FICA share, but the elected amount is still withheld from pay. Whether net pay lands approximately flat depends on the plan design and on whether the employee incurs and substantiates qualifying medical expenses. An employee who does not use the plan will take home less. Reducing wages subject to Social Security tax also reduces the earnings recorded for Social Security purposes, which may reduce an employee’s eventual retirement or disability benefit. Elections are generally irrevocable for the plan year absent a change in status permitted under Treas. Reg. §1.125‑4.
Conditions the result depends on
Any tax result depends on facts we cannot verify from a website: timely adoption of a written plan satisfying 26 U.S.C. §125(d)(1); prospective, documented elections; satisfaction of the nondiscrimination requirements of §125(b) on annual testing; correct payroll coding and reporting; actual participation; and, for any reimbursement claimed under §105(b), substantiation that the payment reimbursed expenses actually incurred for medical care within the meaning of §213(d). Failure at any of these points can render amounts includible in gross income and wages, with correction obligations extending to amended Forms W‑2 and 941 for open years.
An area of active IRS attention
The federal tax treatment of preventive care, wellness, and medical expense reimbursement arrangements has been addressed adversely by the Internal Revenue Service on multiple occasions, including Rev. Rul. 2002‑3, Rev. Rul. 2002‑80, CCA 201622031, CCA 201703013, and CCA 202323006. Arrangements that pay employees cash, or fixed amounts, without regard to medical expenses actually incurred have been treated as producing includible income and wages notwithstanding pre‑tax funding through a cafeteria plan. Descriptions of published guidance on this site are summaries provided for identification and are not a substitute for reading the guidance or obtaining advice on your own facts.
State variation
State income tax, unemployment tax, and workers’ compensation treatment of Section 125 salary reductions varies by jurisdiction, and some states do not conform to the federal treatment. Multi‑state employers should expect different results by state. Nothing here addresses local income taxes, paid‑leave contributions, or wage‑and‑hour consequences of a reduction in stated compensation.
Coverage and MEC status
The benefits described on this site are furnished through EHP Inc. and its carriers and provider networks, and are subject in all respects to the governing plan documents, certificates, formularies, and network availability, which control over any description here. Any insured components of the program are issued by licensed carriers and placed through EHP; Boost Benefits’ role is limited to feasibility analysis, enrollment support, and payroll coordination. The program is intended to sit alongside, and is not a substitute for, major medical coverage or minimum essential coverage. No representation is made that any package constitutes minimum essential coverage for purposes of 26 U.S.C. §4980H or any other provision; request that determination in writing and obtain your own counsel’s review before relying on it.
Relationship of the parties
Boost Benefits acts on behalf of EHP Inc. in presenting this program to employers. References on this site to being “partnered” with EHP describe a commercial collaboration and are not a representation that the two companies are partners or joint venturers in law. The plan, the coverage, the provider networks, and the clinical services described on this site are provided by EHP and its carriers and providers. Boost Benefits does not provide, underwrite, or insure them, and its authority is limited to what EHP has granted it in writing. The two companies are separate entities; neither is responsible for the obligations, acts, or omissions of the other except to the extent the law of agency provides. Boost Benefits is compensated in connection with the placement and servicing of this program, which you should weigh when considering anything it recommends, and which is a further reason to obtain your own tax and legal advice. EHP, EHP Inc., and Essentials Health Plan are marks of their respective owners and are used for identification only. References to third‑party publications, including analyses published by professional services firms, are for identification and do not imply any endorsement, affiliation, or review of this site by those firms.
Currency and changes
Rates, wage bases, statutory and regulatory references, and third‑party program descriptions are stated as of August 2026 and are subject to change without notice. Tax law, published guidance, insurance products, and provider networks change; this site is not updated continuously and may not reflect current law or current program terms. Boost Benefits disclaims any obligation to update it, and disclaims all warranties, express or implied, as to the accuracy or completeness of its contents.