SIMERPU RESEARCH · SOURCE RECAP
Watch out for fraudulent health plan tax avoidance schemes
SIMERPU recap and commentary: Mardy Gould
Opened — main text retrieved
Quick recap
Alston & Bird authors describe classic and newer wellness tax-avoidance pitches, historical enforcement and the distinction between coverage and cash-payment tax treatment.
SIMERPU’s viewpoint
The distinction between coverage and cash-payment treatment is a useful organizing principle in this article. SIMERPU would use it to examine exactly what the employee is receiving at each stage. Historical enforcement examples provide context, while a current proposal still needs a comparison of its own facts.
What this source contributes
The analysis distinguishes coverage from cash payments and uses historical enforcement to explain why the distinction matters.
What remains unanswered
The historical examples must be compared with a current proposal before drawing conclusions about its operation.
Mardy Gould’s take
I would ask the employer to identify what the employee receives at every stage: coverage, care, an insurance benefit or a reimbursement. That exercise makes this article more useful. It also helps a provider explain any legitimate distinction with a concrete transaction instead of relying on a broad assurance.
Questions I would bring to the conversation
1. What does each program component provide?
2. Which historical example is being compared?
3. What facts support the provider’s claimed distinction?
Mardy Gould · Co-Founder, SIMERPU →
What would change our assessment?
A documented transaction comparison could narrow or confirm the relevance of the historical examples.
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: Carolyn Smith and John Hickman, Alston & Bird, LLP
Publisher: Aflac
Original Publication Date: Not stated
Read this alongside…
Each connection has a specific purpose. Compare the sources’ facts, positions and publication dates as you read.
CCA 201622031 — Tax Treatment of Wellness Program Benefits and Employer Reimbursement of Premiums Provided Pre-tax Under a Section 125 Cafeteria Plan
IRS Office of Chief Counsel
Source position: Neutral / explanatory
Review the primary distinction between wellness rewards and premium reimbursement.
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Frequently asked questions about medical expenses related to nutrition, wellness and general health
IRS
Source position: Neutral / explanatory
Clarify the separate medical-purpose question for services.
Read the SIMERPU recap →
What do we need to know when approached by vendors offering payroll tax savings programs?
WTW
Source position: Critical
Translate the technical distinction into an employer’s vendor-review agenda.
Read the SIMERPU recap →
Keep learning with SIMERPU
Build your understanding with learning resources, the free Professional Roadmap and our approach to reviewing sources.
About this source
Original Updated Date: Not stated
Source Type: Insurer-hosted analysis
Model Discussed: wellness plan tax avoidance schemes
Position: Critical
Period: Undated / current reference
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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