SIMERPU RESEARCH · SOURCE RECAP
CCA 201622031 — Tax Treatment of Wellness Program Benefits and Employer Reimbursement of Premiums Provided Pre-tax Under a Section 125 Cafeteria Plan
SIMERPU recap and commentary: Mardy Gould
Opened — main text retrieved
Quick recap
Addresses cash rewards for wellness participation and reimbursement of premiums previously paid through §125 salary reduction. Explains why those payments are not excluded under the stated facts.
SIMERPU’s viewpoint
The memorandum is an important historical reference for two distinct issues: wellness participation rewards and reimbursement of premiums paid pre-tax. SIMERPU would keep those transactions separate when reviewing a proposal. Understanding which issue is present makes the subsequent discussion of medical care and payroll treatment more precise.
What this source contributes
The memo treats participation rewards and reimbursement of pre-tax premiums as distinct questions, a useful starting point for classifying payments.
What remains unanswered
Its historical examples do not supply the facts of a current proposal. Readers need to identify which, if either, of the transactions is present.
Mardy Gould’s take
Before debating a label, I would ask what the employee is being paid for. Is it participation, a returned premium or an identified expense? That answer shapes the rest of the conversation. I want the employer and the employee to hear the same explanation of what the payment represents.
Questions I would bring to the conversation
1. What event or expense creates the payment entitlement?
2. Was the premium already paid with pre-tax dollars?
3. How is a medical reimbursement distinguished from a participation reward?
Mardy Gould · Co-Founder, SIMERPU →
What would change our assessment?
A documented change in what the payment reimburses could affect the comparison; calling the same payment a different benefit would not establish it.
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: Stephen Tackney
Publisher: IRS Office of Chief Counsel
Original Publication Date: 2016-05-27
Read this alongside…
Each connection has a specific purpose. Compare the sources’ facts, positions and publication dates as you read.
Revenue Ruling 2002-3 — Reimbursement of pre-tax health insurance premiums
IRS
Source position: Neutral / explanatory
Read the earlier ruling that addresses pre-tax premium reimbursement.
Read the SIMERPU recap →
CCA 202323006 — Tax Treatment of Employer-Funded, Insured, Fixed-Indemnity Wellness Policy
IRS Office of Chief Counsel
Source position: Neutral / explanatory
Compare the later fixed-indemnity wellness payment example.
Read the SIMERPU recap →
Incentives for Nondiscriminatory Wellness Programs in Group Health Plans
Federal Register
Source position: Neutral / explanatory
Distinguish wellness-program classification from the separate payment-tax question.
Read the SIMERPU recap →
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About this source
Original Updated Date: Not stated
Source Type: Government — nonprecedential tax memorandum
Model Discussed: Cash wellness rewards; reimbursement of pre-tax premiums
Position: Neutral / explanatory
Period: Historical — through 2022
Retrieved: October 31, 2026
Research and date notes
Release date; memorandum dated 2016-04-14. Nonprecedential advice addressing particular arrangements.
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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