Most employees assume their paycheck is fixed — taxes come out, deductions are applied, and what’s left is what they live on. But what if there were a way to legally reduce your tax burden and actually increase your net pay, without working more hours, changing your job, or cutting back on benefits?

That’s exactly what a cafeteria 125 plan deduction can do. And at Health Sphere, we’ve taken it one step further with Core360 — a fully managed program that doesn’t just include Section 125, but also integrates preventative care and specialized reimbursements to create one of the most compliant, benefit-rich programs available today.

If you’re an employer or employee wondering how cafeteria 125 plan deductions actually translate to real savings, this blog will break it down in simple terms — no jargon, no fluff, just clarity and real-world impact.

What Is a Cafeteria 125 Plan Deduction?

A cafeteria plan (named after the idea that employees can “pick and choose” benefits) is a way for employees to use pre-tax dollars to pay for certain expenses like health insurance, dental, vision, and more. When you contribute pre-tax, you reduce your taxable income — which lowers the amount you pay in federal income tax, Social Security, and Medicare.

So, a cafeteria 125 plan deduction means you’re reducing your tax burden and keeping more of your paycheck. Employers benefit too, with lower payroll taxes on every employee enrolled.

But here’s the catch: traditional Section 125 plans are limited. That’s where Core360 comes in.

Core360: A Smarter, More Complete Section 125 Payroll Solution

Health Sphere’s Core360 isn’t just a Section 125 plan. It leverages the tax advantages of Section 125 and combines them with two powerful, fully managed components:

Preventative Care Management Plan (PCMP)

Specialized Insurance Medical Reimbursement Plan (SIMRP)

Together, they create a fully compliant program that delivers far more value than a basic cafeteria plan, all with no out-of-pocket cost to the employer or employee.

This means:

• No change to your current group health plan

• No disruption to your existing payroll provider

• No additional workload for HR or finance teams

And in many cases, an actual increase in take-home pay for employees

Core360 Benefits for Employers

Employers often think that offering better benefits means higher costs. But with Core360, it’s the opposite.

Here’s what you gain:

• Save $600–800/year per W2 employee

• Reduced healthcare claims ($1,400 saved over 3 years)

• No out-of-pocket cost to implement

• Fast, automated rollout (30–45 days)

• Boost employee retention, morale, and performance

• Fully compliant with IRS, HIPAA, and ACA

Let’s say you have 100 employees. That’s up to $80,000 in tax savings every single year — just by implementing Core360. It’s like giving your company a raise without spending a dime.

And because it integrates seamlessly with more than 50 payroll systems, setup is quick and pain-free.

Core360 Benefits for Employees

Employees love Core360 because it directly impacts their wallets and their wellness.

Here’s how:

• 3–4% increase in net paycheck (around $100/month)

• $0 copay for 24/7 Telehealth access

• Mental health, addiction, and counseling support

• Mayo Clinic wellness tools and personalized health dashboard

• Universal Life, Disability, and Critical Illness insurance

• Spouse and dependent enhancements

Best of all — these benefits come with no reduction in existing coverage or pay. In fact, the cafeteria 125 plan deduction reduces taxable income, which is how employees walk away with more money in their pocket every month.

This is real value. Not just for the employee’s health, but for their financial well-being too.

Why It Works: A Quick Example

Let’s break it down.

Imagine an employee earns $50,000/year.

With no cafeteria 125 plan deduction:

Taxable income: $50,000

Approximate taxes: $10,000

Net pay: $40,000

Now let’s say $3,000 of that income is redirected pre-tax toward qualified Core360 benefits.

With Core360:

Taxable income: $47,000

Approximate taxes: $9,400

Net pay: $40,600

That’s $600 more in take-home pay — plus access to $0 copay telehealth, additional insurance coverage, and a suite of wellness resources.

This is why over 40,000 employees have already enrolled in Core360 — and why Health Sphere is rapidly on track to reach our mission of impacting 250,000 lives.

What Makes Core360 Different?

Health Sphere’s mission is simple: help employers offer better benefits that actually improve lives, without increasing costs or adding administrative burden.

Here’s what sets Core360 apart:

• We don’t just implement a Section 125 payroll plan — we enhance it.

• We combine powerful tax-saving structures with real, preventative health benefits.

• We keep it simple, automated, and 100% compliant.

Our motto: Better benefits shouldn’t be complicated. And they shouldn’t cost more.

That’s why Core360 exists — to help companies improve employee well-being, reduce tax waste, and offer modern, effective benefits that employees value.

How to Get Started

If you’re a business owner, HR leader, or benefits coordinator, implementing Core360 is easier than you think. We handle all the heavy lifting:

• You schedule a quick consultation
  
• We estimate your savings and outline the plan

• We handle onboarding, employee education, and payroll integration

• You start saving money in 30–45 days

• No cost. No contracts. No risk.

Just smarter benefits — for you and your team.

Ready to See Real Savings?

If you’re curious how much your business could save — or how Core360 can improve your team’s take-home pay — now’s the perfect time to find out.

Book your 10-minute consultation

Visit tryhealthsphere.com/#calender to schedule now and take the first step toward smarter healthcare savings.