Why the biggest healthcare cost problem has nothing to do with insurance — and why most employers are unknowingly paying payroll tax on it

I didn’t start looking at healthcare plans.

I started looking at payroll and asking a simple question:

"Why are we paying so much tax on everyday healthcare?"

Why This Keeps Getting Worse - Even When You "Do Nothing Wrong”

Health insurance was never meant to handle everyday care.

It was meant to protect against big, rare expenses.

But today it’s used for everything.

So employees hesitate.

“I’ll wait.”

“I don’t want to deal with it.”

“I don’t want to pay out of pocket.”

Small problems get ignored.

Preventive care gets delayed.

Then those small problems turn into big claims.

And when renewal time comes, everyone’s shocked.

Here’s the part most employers never stop to think about:

You’re not just paying too much for routine healthcare.

You’re also paying payroll taxes on it.

So the same dollar hurts you twice.

Once in healthcare costs.

Again in FICA.

The Question Some Employers Finally Asked

Eventually, a few employers stopped asking:

“How do we get a better insurance deal?”

And started asking a more uncomfortable question:

“Why are we paying for basic care this way in the first place?”

They didn’t like the answer.

So they changed the setup.

The First Thing That Didn't Make Sense To Me

Most employers assume healthcare costs are high because healthcare itself is expensive.

Doctors cost more.

Hospitals charge more.

Medications go up every year.

That explanation sounds reasonable.

Until you actually follow the money.

When you do, you discover something surprising.

The biggest healthcare dollars aren’t being spent on emergencies or major medical events.

They’re being spent on everyday care:

Routine doctor visits
Urgent care
Prescriptions
Mental health appointments
Preventive services

Nothing exotic.

Nothing complicated.

Yet all of it is being paid for through insurance systems designed for worst-case scenarios.

Which means the prices are inflated before you even begin.

And then something even stranger happens.

Those inflated healthcare dollars get treated just like wages.

They’re taxed.

What They Changed (And What They Left Alone)

They didn’t change their health plan.

They didn’t reduce benefits.

They didn’t touch employee pay.

They simply stopped paying for everyday care through insurance.

Instead, they added a separate preventive care program alongside their existing plan.

Not instead of it.

Routine care moved first:

Primary care
Urgent care
Mental health
Preventive management
Free prescriptions

Insurance stayed in place... but it's no longer used for everything.

Once that shift happens, the math changes.

The Payroll Tax Effect No One Warns You About

When routine healthcare is provided as a benefit — instead of being paid for like wages — payroll taxes go down.

Not because of a trick.

Not because of a loophole.

Because the tax code has always treated health benefits differently than paychecks.

For many employers, that works out to about $600–$700 per employee, per year in reduced FICA taxes.

Automatically.

No behavior changes required.

No waiting to “see if it works.”

Just a different way of paying for care employees already use.

What This Looks Like in Practice

Here are conservative examples based on typical payrolls:

30 employees → ~$19,000 annually

75 employees → ~$48,000 annually

150 employees → ~$96,000 annually

300 employees → ~$190,000+ annually

In many states, taxable payroll also affects Workers’ Compensation premiums, so those costs often fall too.

This isn’t theory.

It’s math.

Why I’m Willing to Put My Name on This

I’m David Baer.

I run a firm working with organizations on revenue growth and expense reduction.

This program stood out because it doesn’t depend on hope.

It doesn’t require employees to “behave better.”

It works because it changes how the dollars are handled.

Change that — and the outcome follows.

One last thing that’s important to understand:

For qualifying employers, this doesn’t mean adding a new expense.

The savings generated by changing how everyday care is handled are what fund the program itself.

What You Should Do Next...

The next step isn’t a sales pitch.

It’s a short call to answer one question:

Does this setup make sense for your organization?

If not, you’ll know quickly.

If it does, the savings are easy to calculate.

Or reach me out to me directly:

David Baer

503-208-4703

david@ficasavings.us

To be clear... this program isn’t simply about chasing savings.

It’s really about stopping a leak most employers never realized was there.

Once you see it, it’s hard to ignore.

P.S. (Important)

Every time you pay for everyday healthcare the same way you pay wages, you increase your FICA bill.

Not because you have to.

Because that’s how it’s set up.

Change the setup — and the tax problem fixes itself.

That’s the whole story.

A message for employers with 30 or more W-2 employees...

What Employees Notice

From the employee’s point of view, nothing is taken away.

They keep their health plan.

They keep their paycheck.

What changes is how easy it is to get care.

They get:

Quick access to doctors
Mental health support without friction
Preventive care before problems grow
Prescriptions without sticker shock

So they actually use it.

That’s why pressure on the main insurance plan drops.

That’s not a “perk.”

That’s removing obstacles.

Who This Usually Makes Sense For

This approach is typically a fit for organizations that:

Have 30 or more full-time W-2 employees
Are frustrated by rising healthcare costs
Want to add value without increasing spend

It’s already in use by thousands of public and private employers, covering millions of employees.

Including manufacturers, universities, franchise groups, and public agencies.

Why You’ve Probably Never Been Shown This

Most benefit discussions revolve around insurance.

This doesn’t.

It deals with the everyday care insurance was never meant to handle.

That makes it easy to overlook.

Not because it’s risky.

Because it’s simple.