Statutory Legal Opinions, Regulatory Rulings & White Papers

Under ERISA § 3(16)(A), the employer is the statutory Plan Administrator by default. The Master Administrative Services Agreement (ASA) formally delegates ministerial execution to Shielded Horizons LLC pursuant to 29 CFR § 2509.75-8 (D-2). This retains full fiduciary control and administrative fee capture within Shielded Horizons without revenue leakage to external commercial TPAs.

The policy manual states as an inviolable rule that Shielded Horizons pays $0.00 in cash indemnity, bonuses, or cash rebates to employees. 100% of the employee pre-tax allocation is paired with active physician clinical care through Apex-MEC Clinical Preventive Care (Treas. Reg. § 1.213-1(e)(1)(ii) & ACA § 2713) and statutory group term life insurance underwritten by ManhattanLife (IRC § 79 & § 125(f)). There is no circular cash loop.

The manual codifies the exact pre-payroll mathematical formula: If an hourly employee works reduced hours, the automated census engine automatically suspends or prorates the deduction for that payroll period, guaranteeing the employee never falls below the federal $7.25/hr minimum wage.

The manual provides the exact statutory crosswalk table showing why deductions are exempt from Federal Income Tax (IRC § 105(b)/§ 125), Social Security and Medicare FICA (IRC § 3121(a)(2)(B)), and Federal Unemployment FUTA (IRC § 3306(b)(2)(B)). Mapped as two columns: pre-tax salary reduction paired with non-elective flex credits for $0.00 net pay impact.

Benchmarked against independent commercial catalogs (TWP Catalogue 2022 / Teladoc fair-market rates): 24/7 unlimited physician urgent care ($85–$120/mo), tele-mental health ($65–$110/mo), and $50k group life ($18–$35/mo) delivers verified market-rate medical care substantiating real economic medical value under Treas. Reg. § 1.125-1.

Under IRC § 125(b)(2), no more than 25% of statutory benefits may go to Key Employees (> $220k compensation or > 5% owners). Across our corporate hourly groups (such as Chroma Early Learning with 353 staff), Key Employees represent less than 2% of enrollment. Eligibility is uniform (30 days of service) and benefits are equal ($0 copays for all staff), guaranteeing an annual audit pass.

Under IRC § 4980H, employers with 50+ FTEs face $2,970/worker (Penalty A) and $4,460/worker (Penalty B). Shielded Horizons eliminates Penalty A by offering 100% of staff an ACA § 2713 / § 5000A(f) compliant preventive care plan (Apex-MEC Clinical Preventive Care) with $0 copays, backed by electronic waiver tracking. We eliminate Penalty B by pairing the plan with a qualifying Minimum Value Plan (MVP / Major Medical), using Section 125 FICA savings ($600–$900/worker/yr) to subsidize premiums below the IRS 8.39% W-2 Affordability Safe Harbor. (Small employers under 50 FTEs are 100% exempt by statute).