Your Wellness Benefits Team

No.  The Capstone Plus plan is a self-funded overlay program, that supplements, notreplaces, your existing traditional medical insurance plans.  The focus of Capstone Plus is on providing proactive wellness benefits for each employee and their family members (including pets!).  Your employee can continue to use the same providers and receive the same medical care they already have in place with their traditional medical insurance.  The Capstone Plan provides options and potential cost savings, but employees are not required to take those options.  

Both the employers and employees are equally responsible for FICA and FUTA taxes on wages. When the Capstone Plus program is paid with pre-tax funds, that premium lowers the taxable wages for both employers and employees thus lowering the amount of FICA and FUTA taxes they each pay.

The employer should include the pre-tax premium totals paid in the W-2 for each employee in line 12 DD. However, the employer is not responsible for any reporting of benefits or claim payments made to the employees. 

As with pre-tax deductions for items such as Health Savings Accounts (HSA), major medical, dental, and vision plans, the employee’s premium for the Capstone Plus plan is paid for on a pre-tax basis (a Section 125 Plan).  These pre-tax contributions lower taxable wages, and therefore the employees’ contributions to FICA and FUTA taxes.

Given that an individual’s Social Security benefit is based on various factors, including an individual’s lifetime earnings, age when they started working and for how long they worked, each person’s calculation is different. Generally, however, the Capstone Plus program should have a minimal impact as the premium amount for the benefit is not large enough to impact over 20+ years of average earnings.

No, there is no reporting requirement for the employer.  Indemnity payment claims are sent directly to the employee.  No tax document is issued to the employee, and the IRS does not receive any information pertaining to the indemnity plan payments. The employer will not receive notice of an indemnity claim payment and is not required to report this on the W2.