SIMERPU RESEARCH · SOURCE RECAP
What Goes Around: IRS Audits of Fixed Indemnity Health/Wellness Benefit Plans that Offer Purported Tax Savings
SIMERPU recap and commentary: Mardy Gould
Opened — main text retrieved
Quick recap
Reports that the IRS has begun auditing certain fixed-indemnity health/wellness arrangements. Describes premium-return designs, disputed tax exclusions and potential employer assessments.
SIMERPU’s viewpoint
The reported audit activity adds an operational dimension to the debate. SIMERPU’s view is that a program should be able to produce a coherent record of elections, funding, benefits and payroll treatment after implementation. The article does not establish the outcome of every audit or the treatment of every model.
What this source contributes
The reported audits make record retention, implementation and responsibility visible parts of an employer’s evaluation.
What remains unanswered
The report does not establish the outcome or scope of every audit, or whether a different employer’s arrangement has been examined.
Mardy Gould’s take
I would want the operating plan to explain what happens when records are requested. Who collects the elections, payment records and plan documents? Who communicates with the employer’s advisers? Those responsibilities should be clear while the program is running, so the employer is not reconstructing its own arrangement later.
Questions I would bring to the conversation
1. Which arrangements does the report actually describe?
2. Who retains elections, payments and supporting records?
3. What assistance is contractually available if an inquiry arrives?
Mardy Gould · Co-Founder, SIMERPU →
What would change our assessment?
Documented audit outcomes or additional facts about the examined arrangements could refine the implications. An audit report alone is not a universal outcome.
Read the original source
The original author and publisher are credited below. Continue to their article, document or source page for the complete context.
Original Author: Steven P. Johnson and Anna M. Pomykala
Publisher: Morgan Lewis / ML BeneBits
Original Publication Date: 2026-09-29
Read this alongside…
Each connection has a specific purpose. Compare the sources’ facts, positions and publication dates as you read.
CCA 202323006 — Tax Treatment of Employer-Funded, Insured, Fixed-Indemnity Wellness Policy
IRS Office of Chief Counsel
Source position: Neutral / explanatory
Compare the reported arrangements with the IRS’s published example.
Read the SIMERPU recap →
CCA 201703013 — Tax Treatment of Benefits Paid by Fixed-Indemnity Health Plans
IRS Office of Chief Counsel
Source position: Neutral / explanatory
Review the earlier funding analysis that helps explain the controversy.
Read the SIMERPU recap →
Short-Term, Limited-Duration Insurance and Independent, Noncoordinated Excepted Benefits Coverage
Federal Register
Source position: Neutral / explanatory
Separate the audit discussion from later rulemaking developments.
Read the SIMERPU recap →
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About this source
Original Updated Date: Not stated
Source Type: Law firm analysis
Model Discussed: Fixed Indemnity Health/Wellness Benefit Plans
Position: Critical
Period: Recent — 2023–2026
Retrieved: October 31, 2026
Research and date notes
No additional retrieval note.
Each record identifies the material retrieved. SIMERPU’s viewpoint and Mardy Gould’s take are editorial commentary; the source-position label describes the original source’s stance. Read the original and its qualifications when evaluating a particular arrangement.
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