HitesmanLaw Opinion Letter (May 2025) — What It Actually Says

Darcy L. Hitesman's 8-page opinion letter (May 5, 2025) on the Section 125 Preventive Care program, line by line. Super Lawyer-rated ERISA attorney, 35+ years in IRC § 125 practice. Concludes the program 'satisfies applicable IRS requirements.'

This post unpacks the underlying authority, the practical implications for employers, and how the program structure stays inside the lines.

The Section 125 Preventive Care variant we work with carries a complete compliance documentation set: the May 2025 HitesmanLaw P.A. opinion letter (8 pages), the August 2025 CBIZ Advisors LLC independent review, the underlying IRS authority (IRC §§ 125, 105, 106, plus Rev. Rul. 69-154, Situation 3), and $500,000 of insurance-backed legal protection per enrolled employer. The documentation is share-able with your CPA, your benefits broker, your attorney — and routinely is, before any client signs.

How the math works (in 90 seconds)

For every enrolled W-2 employee earning $25,000+/year and covered under an ACA-compliant group health plan:

• Pre-tax salary reduction: $1,200/month · $14,400/year
• Employer FICA savings (7.65%): $1,101.60/year
• Net employer savings: $681.60/employee/year
• Employee net take-home raise: +$71.96/paycheck (~$863/year)
• Workers' Comp reduction: 30–60% real-world at next audit cycle (because WC base = taxable payroll, which Section 125 reduces by definition)

A 50-employee company nets $34,080/year in net FICA + industry-specific WC reduction. Run the calculator → for your specific number.

Verified compliant — May 2025 + August 2025

The Section 125 Preventive Care program described above was independently reviewed in 2025 by:

• HitesmanLaw P.A. (May 5, 2025) — 8-page formal legal opinion from Darcy L. Hitesman, J.D., a Super Lawyer-rated ERISA attorney with 35+ years in IRC § 125 practice, AV-rated since 1998, co-author of the national ERISA compliance manual. Concludes the program "satisfies applicable IRS requirements."
• CBIZ Advisors LLC (August 22, 2025) — top-7 U.S. accounting firm, 135,000+ clients. Independent review confirms compliance with IRC §§ 125, 105, 106, ERISA, ACA, and COBRA when operated per its provisions.
• $500,000 insurance-backed legal protection per enrolled employer + $10,000 per employee participant.

Read the full compliance authority page → · IRS.gov — Cafeteria Plans (Section 125) · 26 U.S. Code § 125

A real result from a real company

Affinity Hospice — multi-state hospice care · CFO Ariel Joudai (CPA) commissioned the CBIZ review before enrolling — saves $140,000+/year through this exact program structure. Read the full case study →

This isn't a projection — it's reported, on the public record, from operators whose own CPAs and attorneys reviewed the documentation before signing. Browse the full case study set →

What the Hitesman letter actually concludes (and why those words matter)

The May 5, 2025 letter from Darcy L. Hitesman of HitesmanLaw P.A. is an 8-page formal legal opinion addressed to the program administrator. Its operative conclusion uses the precise phrase: the program "satisfies applicable IRS requirements." That language is the standard formulation ERISA and tax counsel use when issuing a clean opinion — it's neither hedged ("the program is reasonably likely to satisfy") nor narrowly scoped ("subject to the assumptions below"). It's a direct conclusion, on letterhead, signed by a Super-Lawyer-rated practitioner with 35+ years of IRC § 125 practice experience.

The letter walks through five substantive analyses: (1) the cafeteria plan written-document requirements under IRC § 125(d); (2) the salary-reduction election mechanics under Treasury Reg § 1.125-1; (3) the participatory wellness component compliance with HIPAA wellness rules at 29 C.F.R. § 2590.702-1; (4) the nondiscrimination testing structure under IRC § 125(b); and (5) the interaction with ACA employer mandate rules under IRC § 4980H. Each analysis cites the relevant authority, applies it to the program's documented structure, and concludes the structure satisfies the requirement.

What the letter does NOT do — and what's worth flagging — is opine on individual employer fact patterns. The opinion is on the program structure as documented; an individual employer's specific implementation, payroll integration, and employee enrollment must be administered correctly for the opinion to apply to that employer's plan year. The plan administrator handles that implementation, which is why the case-study evidence on this site holds across operators in different industries and states.

How to verify it yourself

Three primary sources, all public:

1. IRS.gov — Cafeteria Plans — the law in the IRS's own words.
2. 26 U.S. Code § 125 — the federal statute itself.
3. The Hitesman opinion + CBIZ review — both share-able PDFs, available on your free 15-minute analysis call.

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