How will the PHMP look on my paycheck?

Here’s a breakdown of how the Proactive Health Management Plan appears on your paycheck and how it affects (and potentially increases!) your take-home pay.

The savings you see below is based on an example of an employee earning $1,000 a week.

where the PHMP appears

Once you join the Proactive Health Management Plan, you’ll notice that the PHMP has appeared. In some cases, the PHMP shows up in the earnings column. In others, it’s in the deductions column. Wherever it appears, it functions the same way.

To show you how the PHMP works, we’re going to use the example of it appearing in the deductions column.

a closer look at the numbers

$174.23

Plan premium

The first part is the plan premium, listed on this paycheck as phmp pre-tax 125. Here it is a deduction — a deduction that is immediately offset by the next part.

The plan premium is a pre-tax deduction, similar to your health insurance or 401(k). Pre-tax deductions mean that the amount of money you are taxed on is lowered.

$144.23

claim payment

The claim payment is applied on each and every paycheck by the insurance carrier Companion Life for being a member of the PHMP and for engaging in monthly health activities.

In this case, the claim payment shows up in the deductions column as a negative number. That means it’s actually a positive number. So the claim payment is the PHMP adding $144.23 back into your paycheck.

and so….

$174.23

Plan premium

minus

$144.23

claim payment

equals

$30

total cost of the phmp

but what about putting more money in my paycheck?

Here’s how the PHMP puts money back into your paycheck.

Since the plan premium is pre-deducted from your taxes, that means, if you make $1,000 per week, you’re only being taxed on $825.77. ($1,000 – $174.23 = $825.77)

Without the PHMP, you are ordinarily taxed on the full amount of money you make. So, in this case, you’d be taxed on the full $1,000.

The picture here shows what you’d be taxed without the PHMP.

And now here’s what you’d be taxed on with the PHMP.

  • The federal withholding number went from $91.14 to $67.74
  • The social security number went from $62 to $51.20
  • And the medicare number went from $14.50 to $11.97

All of that is because you are being taxed on the $825.77 amount, not the full $1,000. Because your taxable income is lowered — without actually lowering your income! — you’re eligible to be taxed on this lower amount.

$36.73

tax savings with the phmp

And so, with the Proactive Health Management Plan, you have saved $36.73 in taxes! Yay!

Now we’ll minus the total cost of the phmp from that amount.

finding the total savings

$36.73

tax savings with the phmp

minus

$30

total cost of the phmp

equals

$6.73

amount added to paycheck

Now, $6.73 doesn’t sound like a lot. But remember: that amount is added to your paycheck every week.

So, $6.73 x 52 weeks per year = $349.96!

Also take into consideration that this example is based off a $1,000 per month salary. So depending on your salary, that number can increase!

A lot of math — but worth it!

We know that’s a lot of math, but as you can see, the Proactive Health Management Plan offers a significant financial advantage … so that makes the math part a little less mathy.

In case this walkthrough did not answer all of your questions, we also have this video that provides more information about how the PHMP can put extra money in your paycheck.