How Employers Are Cutting Healthcare Costs Without Renegotiating Insurance or Reducing Benefits

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 Part Most Employers Don’t Budget For

There’s another cost most employers don’t plan for — because it doesn’t show up as a single line item.

It shows up everywhere else.

As healthcare costs continue to rise, the impact doesn’t stop at premiums.

It spreads.

Employers feel it through:

Higher contributions just to keep coverage acceptable
Pressure to increase wages so employees can afford deductibles
Rising turnover when benefits stop feeling like benefits
Lower morale as employees pay more and get less

Employees feel it too:

More of each paycheck going toward healthcare
Delayed care because “it’s too expensive to use the plan”
Frustration that quietly turns into disengagement

This is what makes doing nothing so expensive.

Not the headline increase —

but the secondary costs that accumulate quietly over time.

The First Thing That Didn't Make Sense To Me

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

But when you actually trace where the money goes, that explanation falls apart.

The biggest dollars aren’t going to catastrophic care.

They’re not going to rare events.

They’re going to ordinary, everyday healthcare:

Primary care visits
Urgent care
Prescriptions
Mental health check-ins
Preventive services

None of this is complex medicine.

Yet it’s all being purchased through insurance systems designed for lawsuits, trauma, and worst-case scenarios.

Which means it’s priced accordingly.

And then—almost as an afterthought—those inflated dollars are treated as taxable payroll.

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 optimism, carrier promises, or employee behavior changing overnight.

It depends on math.

Change the structure, and the outcome follows.

The Only Sensible Next Step...

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 Experience

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.

Why the biggest driver of healthcare spending has nothing to do with insurance — and why most employers are paying payroll tax on it

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.

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.

Why Standing Still Is No Longer Neutral

When healthcare costs rise faster than revenue, employers are forced into bad choices:

Shift more cost to employees

Reduce benefits

Absorb the increase and hope it evens out

None of those fix the underlying problem.

They just move the pressure around.

And the longer everyday care is handled the same way it’s always been handled, the harder it becomes to reverse the damage.

That’s why more employers are no longer asking,

“How do we manage this year’s increase?”

They’re asking,

“How do we stop this from compounding?”

The Turning Point for Many Employers

At some point, the realization sets in:

If routine healthcare keeps getting more expensive —

and employees keep using it less —

and payroll keeps getting squeezed —

then the problem isn’t effort.

It’s structure.

And structural problems don’t correct themselves.

They only get more expensive.