Being a small business owner means you’re constantly searching for methods to help your staff members without increasing expenses. Attracting and keeping talent depends on offering good incentives, but with limited funds, it may seem impossible. Should you be familiar with a Section 125 Flexible Spending Plan or Section 125 Plan Health Plan, you could question whether it is feasible or practical for your company to provide one.

The short answer? Yes—and there’s a smarter way to do it.

What Is a Section 125 Plan?

Defined by the IRS, a Section 125 Plan—also known as a Cafeteria Plan—is a tax-advantaged benefits program. It reduces their taxable income since it lets workers use pre-tax money to pay for particular benefits. For companies, it results in fewer payroll tax obligations.

Most small companies, however, get stuck here: conventional Section 125 plans can be complicated, expensive to run, and of little use. The Lumara Plan fits in there.

Not Your Average Section 125 Plan

The Lumara Plan is not just a Section 125 plan—it leverages Section 125 in combination with two powerful components:

• Preventative Care Management Plan (PCMP)

• Self-Insured Medical Reimbursement Plan (SIMRP)

Together, these create one of the most compliant, benefit-rich programs available—purpose-built for small and mid-sized businesses that want to offer real value without taking on more cost or administrative burden.

Why It Works For Small Businesses

The biggest misconception about Section 125 plans is that they’re only feasible for large employers. The Lumara Plan breaks that mold by offering:

• No out-of-pocket cost to the business

• No change to existing health plans

• No impact on employee take-home pay

• Fully automated implementation in less than 45 days

It’s a hands-off, high-impact solution that makes employee benefits practical, even for lean teams.

What You Get

Employer Benefits

• Save approximately $600 per W2 annually

• Reduce healthcare claims (average $1,400 savings over 3 years)

• Fast, automated rollout in under 45 days

• Boost retention and performance

• Immediate impact on your bottom line

Employee Benefits

• 3–4% increase in net paycheck (about $100 per month)

• $0 copay for Telehealth, mental health, and wellness support

• Access to Mayo Clinic tools and a personalized health dashboard

• Universal Life, Disability, Critical Illness coverage

• Spouse and dependent coverage options

More than 40,000 employees are already enrolled in the Lumara Plan and benefiting from its modern structure.

The Problem With Traditional Section 125 Plans

Many Section 125 Flexible Spending Plans require employees to set aside money for future medical expenses—money they lose if it’s not used by year-end (commonly called the “use-it-or-lose-it” rule). That alone can make employees hesitant to enroll.

For employers, the setup can be expensive and difficult to manage, especially without a full HR team.

The Lumara Difference

The Lumara Plan solves these problems by offering a compliant, turnkey solution that goes beyond what traditional Section 125 plans can do. Instead of forcing employees to gamble with their own money, it provides real, tangible benefits backed by fully managed care and reimbursement systems.

And for the employer? No extra workload. No added cost. Just results.

Why Tax Efficiency Matters

Here’s a hard truth: most small businesses are unknowingly wasting thousands in payroll taxes every year.

That’s because they’re not using tools like Section 125 to their full advantage. With the Lumara Plan, that waste gets turned into savings, without sacrificing support for your team.

It’s modern, compliant, and designed to deliver ROI from day one.

Compliant By Design

The Lumara Plan was built from the ground up to meet today’s compliance standards:

• Built around Section 125, PCMP, and SIMRP

• Fully managed with expert guidance

• IRS-compliant and audit-ready

• Designed to integrate with your current payroll and benefits structure

You don’t need to become a tax expert or benefits administrator. Lumara handles the details so you can focus on running your business.

Who Is Lumara For?

This plan is ideal for small and mid-sized businesses that:

• Want to offer more competitive benefits

• Need to control costs without cutting value

• Are concerned about compliance and administrative overload

• Believe in supporting their workforce, but can’t afford traditional healthcare expansion

If that sounds like your business, the Lumara Plan might be the smartest benefit you’re not using yet.

Final Thoughts: Yes, You Can Offer a Section 125 Plan—Smarter

Offering a Section 125 Health Plan doesn’t have to be expensive or complicated. With the Lumara Plan, your business can unlock real tax savings, provide meaningful benefits to employees, and stay fully compliant—all without taking on additional costs or administrative burden. It’s a modern, fully managed solution that transforms tax waste into value, strengthens retention, and supports your workforce in ways traditional plans simply can’t. 

Thousands of employees are already experiencing the benefits, and your business could be live with Lumara in less than 45 days. If you’re looking for a smarter, cost-free way to enhance your benefits strategy, the Lumara Plan is the opportunity you’ve been waiting for.

Ready to Fix Your Tax Waste?

Talk to one of our experts today and see how the Lumara Plan can work for your business.

Book your 10-minute consultation