The IRS Loophole That Saves Employers $640 Per Employee And Gives Workers A Raise
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In this episode of Dropping Bombs, host Brad Lee interviews Michael Naughty, founder of Small Biz Benefits Pro, about a little-known IRS loophole embedded in the Affordable Care Act that allows employers to save up to $640 per employee annually while simultaneously improving employee benefits and increasing take-home pay. The program, known as a Wellness Integrated Medical Program Expense Reimbursement (WIMPR), leverages Section 125 pre-tax deductions and post-tax reimbursements to create tax savings for both employers (on FICA taxes) and employees (reduced income taxes). The benefits include access to supplemental health insurance for critical illness, accident coverage, and virtual urgent care—reducing unnecessary ER visits and medical costs. Michael explains that the program requires no changes to existing health insurance, minimal effort from employers, and is fully compliant with IRS, ERISA, and HIPAA regulations. He shares his personal journey from aspiring musician to insurance entrepreneur, emphasizing the power of residual income and personal development. The episode also covers how business owners, CPAs, and salespeople can get involved, with opportunities for recurring commissions and training. Michael stresses the importance of mindset, skill, and habits in achieving financial freedom and encourages listeners to take action by booking a free discovery call to assess their potential savings.
Employers can save up to $640 per employee annually using an IRS-compliant Section 125 plan with post-tax reimbursement.
Employees receive enhanced benefits (e.g., critical illness cash payouts, virtual urgent care) with no reduction in net take-home pay—often a net increase.
The program requires no changes to existing health insurance and minimal effort from employers; implementation is handled by a licensed team.
Business owners, CPAs, and salespeople can earn recurring commissions by referring or implementing the program.
The program is federally compliant (IRS, ERISA, HIPAA) and has been successfully implemented for over a decade with zero audit issues.
…and 3 more takeaways available in PodZeus
The $640 Per Employee IRS Loophole
“You can make 10, 20, 30 grand a month off of one shot. And it pays recurring, doesn't it? That's right. There's no reason they can't clear six figures in their first year.”
How the WIMPR Program Works
“We're creating tax savings for the employers on the FICA tax side. We're creating tax savings for the employees because we're doing a section 125 pre-tax deduction with a post-tax reimbursement.”
Benefits for Employees and Employers
“In most cases, it's a net increase in their take-home pay at the same time so it's a win-win situation for everybody involved.”
Implementation and Accessibility
Michael outlines how easy it is to implement the program—no need to change insurance brokers, minimal disruption to operations, and a 10-minute employee education session. He emphasizes that his team handles all compliance and payroll integration.
The Business Opportunity: Sales, Commissions, and Training
Michael discusses the opportunity for salespeople and CPAs to earn recurring income by referring businesses. He shares his own journey from musician to entrepreneur and explains how he trains new reps to succeed in the industry.
“You can make 10, 20, 30 grand a month off of one shot. And it pays recurring, doesn't it? That's right. There's no reason they can't clear six figures in their first year.”
“We're creating tax savings for the employers on the FICA tax side. We're creating tax savings for the employees because we're doing a section 125 pre-tax deduction with a post-tax reimbursement.”
“In most cases, it's a net increase in their take-home pay at the same time so it's a win-win situation for everybody involved.”
Host
Guest
Michael Naughty
person
Brad Lee
person
Small Biz Benefits Pro
organization
Affordable Care Act
other
Section 125
other
WIMPR
other
MJ Insurance Services
organization
Cardiff
organization
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