Recapture Capital deploys a federally supported, zero-net-cost health benefits strategy that generates $640+ per employee, per year in FICA savings — while giving your team better healthcare and bigger paychecks. From 100 employees to 100,000+.
The Mechanism
A Self-Insured Medical Expense Reimbursement Plan (SIMERP) integrates a Section 125 Cafeteria Plan with a Section 105 Reimbursement Plan. Pre-tax payroll reclassification reduces your FICA base — legally, structurally, and permanently.
A portion of employee compensation is reclassified as pre-tax wellness benefit contributions through a Section 125 Cafeteria Plan — reducing the gross taxable payroll base.
Lower taxable payroll base means lower FICA obligations for both employer and employee. The IRS wrote these rules. We help you use them.
Workers' Comp premiums are calculated on reportable gross payroll. When that number drops, premiums follow — same carriers, same coverage, less cost.
Employees receive $0-copay virtual primary care, telehealth, behavioral health, and pharmacy benefits through an integrated platform powered by Revive Health.
Straight Talk
An IRS-compliant, actuarially certified payroll tax recovery structure using established IRC provisions — §125, §105, §106, §213(d). Measurable FICA reduction, Workers' Comp savings, and enhanced employee benefits. Zero employer cost. Zero disruption.
Not a tax shelter, loophole, or aggressive position. Not insurance. Does not replace your group health plan. Does not reduce employee take-home pay. Not a fixed-indemnity product. It is a participatory wellness program with §213(d) certified medical care services.
Compliance First
Verified against IRS Revenue Ruling 2002-3, Chief Counsel Memos 201703013, 201622031, 201719025, and CCA 202323006. Actuarially certified FMV. Full indemnification available.
Frequently Asked Questions
Your projected recovery is based on illustrative benchmarks. In a zero-obligation 30-minute consultation, we verify the EBITDA impact against your specific employee census.
How It Works
A SIMERP integrates a Section 125 Cafeteria Plan with a Section 105 Self-Insured Medical Expense Reimbursement Plan — creating structural FICA reduction, Workers' Comp savings, and enhanced wellness benefits.
The Process
We ingest payroll census data to validate projected savings and confirm Section 125 eligibility. Mock Payroll Runs ensure deductions reconcile in your GL before going live.
Customized Section 105 SIMRP with preventive care satisfying IRS 213(d). ERISA documents, employee comms, and Digital Compliance Vault established.
Pre-tax deductions begin through your existing payroll — ADP, Paychex, Gusto, Rippling. No carrier changes. Employees access $0-copay virtual care immediately.
Quarterly reviews, automated participation monitoring, nondiscrimination testing, annual updates. Audit-ready at all times.
The Math
| Metric | Per Employee | 1,000 Employees |
|---|---|---|
| Illustrative Deduction | $1,200 | $1,200,000 |
| FICA Recovery (7.65%) | $91.80 | $91,800 |
| Workers' Comp Reduction | $48.00 | $48,000 |
| Corporate Tax Deduction (21%) | $252.00 | $252,000 |
| Total Gross Recovery | $391.80 | $391,800 |
Zero-obligation consultation to verify the EBITDA impact for your specific employee count and state tax nexus.
Legal & Actuarial Framework
Built on rock-solid legal foundations — codified in the IRC, validated by IRS Chief Counsel, backed by decades of regulatory precedent.
Pre-tax salary reductions for qualified benefits. In the tax code since 1978.
Tax-free reimbursements for medical expenses. CCA 202323006 approves service-based models.
Excludes employer-provided medical coverage from gross income. Wellness plans qualify per Memo 201719025.
Defines eligible care: telehealth, preventive, mental health, pharmacy. All SIMERP benefits are 213(d) certified.
Wellness reimbursements for §213(d) care excluded from gross income under §106(a)/§105(b). Foundational SIMERP validation.
Wellness plans independently qualify as accident/health plans under §106. Cafeteria plan contributions are pre-tax.
Approves service-based reimbursement models under IRC 105(b). Most current regulatory support.
Establishes precedent for standardized actuarial FMV of medical care services.
"This isn't a tax loophole. It's a tax structure — codified in the Internal Revenue Code, validated by decades of IRS Chief Counsel guidance, and used by thousands of employer groups nationwide."
Four inputs. One executive summary. Five-year EBITDA projections.
Verified against IRS Revenue Ruling 2002-3 and Memo 201703013
| Metric | Per Employee | Total Annual |
|---|---|---|
| Gross FICA Tax Recovery | — | — |
| Workers' Comp Reduction | — | — |
| Corporate Tax Deduction (21%) | — | — |
| Total Hard Dollar Recovery | — | — |
Net Employer Cost: $0 · Employee Take-Home Change: $0
Year 1
—
Year 3
—
Year 5
—
Estimated Operational Upside (1% Turnover Reduction × $15,000/hire):
—
Total Projected Economic Impact: —
Figures are for illustrative purposes based on a typical annual deduction of $1,200 per employee, a 21% federal corporate tax rate, and standard FICA contributions. Actual savings may vary based on state tax nexus, workers' compensation classifications, and employee participation rates. This does not constitute formal tax or legal advice; consult with your CPA or tax counsel to confirm specific impacts on your P&L.
Industries
W-2 employees + FICA obligations = the math works. Every industry. All 50 states.
WC rates of 3.5–6.0 per $100 make manufacturing the highest-ROI vertical. Dual FICA + WC savings.
High turnover + expensive benefits. SIMERP reduces FICA across large workforces while improving retention with telehealth and mental health.
High-headcount industries benefit disproportionately. A 5,000-employee chain recovers $1M+ annually.
School districts and state agencies qualify equally. Recaptured capital funds wellness without budget increases.
Redirect FICA savings into executive retirement instruments — funded by money otherwise going to the IRS.
WC rates of 4.0–8.0+ create the highest per-employee ROI in any sector.
FAQ
Free Analysis
No obligation. No cost. FICA recapture potential, Workers' Comp savings, and 5-year EBITDA projection.
All communications are encrypted and confidential.
"The best time to recapture lost capital was yesterday. The second best time is right now."
CFO Resource Center
Expert analysis on SIMERP, FICA strategy, Workers' Comp optimization, and IRS compliance — written for finance executives.
A detailed breakdown of the FICA recovery mechanism that returns $500-$900 per employee annually through Section 125 SIM
How IRC §213(d), §106(a), and §105(b) interact to create the lawful, audit-defensible foundation of SIMERP payroll tax r
How the wellness benefit layer in a SIMERP program serves dual purposes: maintaining IRS compliance through participator
How SIMERP reduces reportable gross payroll, triggering automatic Workers' Compensation premium reductions of 20-30% wit
How SIMERP programs are entirely funded through existing payroll tax inefficiencies, requiring zero employer capital inv
Complete compliance guide for Section 125 SIMERP programs. Every IRC section, IRS memo, and audit defense strategy expla
Every dollar remitted in avoidable FICA taxes never compounds. How SIMERP complements your retirement strategy.
SIMERP reduces reportable payroll, reducing Workers' Comp premiums up to 30%. Most advisors capture one savings stream.
A CFO's guide to Treasury Regulation §1.105-11 — the regulatory foundation of SIMERP self-insured plans.
Compliance Vault
IRS Chief Counsel memoranda, actuarial standards, and statutory references — the complete legal foundation for SIMERP payroll tax recovery.
Foundational SIMERP validation. Clarifies that wellness program reimbursements for IRC §213(d) medical care are excluded from gross income under §106(a) and §105(b).
Download DocumentMost current regulatory support (June 2023). Specifically approves service-based medical reimbursement models under IRC §105(b).
Download DocumentThe statutory foundation for pre-tax salary reclassification through Cafeteria Plans (§125) and Self-Insured Medical Expense Reimbursement Plans (§105).
Download DocumentStandards for IRC §213(d) certification of wellness services. Based on Revenue Ruling 2002-3 actuarial methodology for medical care valuation.
Download DocumentConfirms wellness plans independently qualify as accident and health plans under §106. Cafeteria plan contributions are properly treated as pre-tax.
Download DocumentNondiscrimination requirements for self-insured plans. Establishes the 70% participation safe harbor and eligibility/benefits testing protocols.
Download DocumentThe documents provided in this Vault are for technical reference by finance and legal teams. Recapture Capital provides structural administration and does not provide formal tax or legal advice. Consult with your CPA or tax counsel to confirm specific impacts on your organization.
About Recapture Capital
With over 30 years of professional experience spanning aviation and financial services, John Krowiak brings a unique discipline to employer tax recovery that most advisors simply cannot match.
As a retired airline and corporate pilot, John spent decades in an environment where preparation is everything. Pilots don't hope for good weather — they prepare for every scenario. They run checklists before every flight. They anticipate failures before they happen.
That same mindset drives how John approaches SIMERP implementation and payroll tax recovery. Every engagement begins with rigorous census analysis. Every plan document is reviewed against current IRS guidance. Every compliance vault is built to withstand audit scrutiny.
John founded Recapture Capital on a simple premise: most organizations are losing capital to tax inefficiencies they don't know exist. The IRS wrote the rules that make recovery possible. The only variable is whether your organization chooses to act on it.
"I don't sell products. I solve tax and income problems. The math either works or it doesn't — and I won't put your organization in a position where it doesn't."
Credentials & Licensing
Case Studies
Illustrative examples based on standard SIMERP benchmarks.
Retail · Midwest · 150 W-2 Employees
Challenge
Rising Workers' Comp premiums. High-deductible health plans driving turnover. No bandwidth for complex benefits administration.
Results
| Metric | Annual Impact |
|---|---|
| FICA Tax Recovery | $11,016 |
| Workers' Comp Reduction | $8,400 |
| Corporate Tax Deduction | $30,240 |
| Total Annual Recovery | $49,656 |
*Illustrative example at 80% participation, $1,200 deduction, 2.8% WC rate.
Manufacturing · Southeast · 1,500 W-2 Employees
Challenge
WC premiums exceeding $900K annually. Difficulty competing for skilled labor against larger firms.
Results
| Metric | Annual Impact |
|---|---|
| FICA Tax Recovery | $110,160 |
| Workers' Comp Reduction | $252,000 |
| Corporate Tax Deduction | $302,400 |
| Total Annual Recovery | $664,560 |
| 5-Year Retained Earnings | $3,322,800 |
*Illustrative example at 80% participation, $1,200 deduction, 5.0% WC rate.
Healthcare · Multi-State · 8,000 W-2 Employees
Challenge
22% attrition rate costing $14M annually. Benefits budget exhausted. General Counsel required rigorous compliance review.
Results
| Metric | Annual Impact |
|---|---|
| Hard Dollar Recovery | $2,640,320 |
| Turnover Reduction Savings | $1,800,000 |
| Total Economic Impact | $4,440,320 |
| 5-Year Retained Earnings | $13,201,600 |
*Illustrative example at 80% participation, $1,200 deduction, 2.5% WC rate.