Direct, verifiable answers to the core regulatory questions asked by underwriters, employer HR directors, and DOL/IRS auditors. Click any question to navigate directly to the governing policy, statutory citation, or proof artifact.
This standardized audit protocol outlines the eight required statutory milestones enforced by Shielded Horizons LLC for Chroma Early Learning Academy LLC. Every requirement corresponds directly with our library of legal underwriting opinions and federal agency joint rulings.
| Milestone | Governing Regulation | Supporting Library Document | Execution Status on File |
|---|---|---|---|
| 1. Written Plan Document | Treas. Reg. § 1.125-1(c) | WIMPER Key to Compliance 2024 | ✓ Adopted (Plan #501) |
| 2. Anti-Abuse Indemnity Defense | IRS CCA 202323006 & § 213(d) | Legal Underwriting Opinion PLLS | ✓ Safe Harbor Insulated ($0 Cash) |
| 3. Participatory Wellness Safe Harbor | 42 U.S.C. § 300gg-4(j)(3)(C) | Federal Register (78 FR 33158) | ✓ 100% Health Contingent Exempt |
| 4. Payroll FICA/FUTA Tax Exclusion | IRC § 3121(a)(2) & § 3306(b)(2) | PCM Program SIMRP Tax Crosswalk | ✓ Two-Column Mapping Validated |
| 5. Fair-Market Retail Valuation | Treas. Reg. § 1.125-1 | TWP Retail Catalogue 2022 | ✓ $168–$265/mo Retail Documented |
| 6. In-House Fiduciary ASO Designation | ERISA § 3(16)(A) & 29 CFR 2509.75-8 | WIMPER Statutory Compliance Guide | ✓ Shielded Horizons Designated |
| 7. HIPAA Data Protection & BAA | 45 CFR § 164.502 / § 164.504 | Health Compass White Pages | ✓ Executed 24-hr Breach SLA |
| 8. Non-Discrimination & FLSA Audit | IRC § 125(b)(2) & 29 U.S.C. § 206 | SIMRP Compliance Checklist | ✓ <2% Key Concentration (Pass) |
Chroma Early Learning Academy LLC ("Plan Sponsor") hereby enacts and maintains the Flexible Benefits Cafeteria Plan (Plan 501). The primary purpose is to enable eligible W-2 employees to elect pre-tax statutory benefits in lieu of taxable cash compensation, in full accordance with Internal Revenue Code Section 125.
1. Service Requirement: All active employees completing thirty (30) days of continuous employment are eligible to enroll.
2. Eligible Group: Includes all full-time and part-time educators and support staff across the client's campuses (currently 353 active employees).
3. Irrevocability Rule: Pursuant to Treasury Regulation § 1.125-4, elections cannot be revoked or modified during the 12-month Plan Year except upon a certified Qualifying Life Event (QLE) submitted within 30 days.
To ensure employees experience zero out-of-pocket payroll reduction, Chroma Early Learning Academy LLC allocates a non-elective monthly Employer Flex Credit under IRC § 125(f). The credit exactly balances against the pre-tax salary reduction, providing 24/7 virtual urgent care and life insurance at $0.00 net change in employee take-home pay.
As affirmed in the independent legal underwriting counsel opinion by Attorney George K. Brew (P.L. Legal Services), the pairing of legitimate virtual physician access with statutory group life insurance under an in-house Section 125 cafeteria plan satisfies all federal statutory tests and is immune from IRS circular reimbursement enforcement.
The following statutory citations govern payroll processing and tax reporting for Chroma Early Learning Academy LLC (EIN: 58-2940191):
| Tax Category | Statutory Code Authority | Payroll Treatment | W-2 Reporting Impact |
|---|---|---|---|
| Federal Income Tax Withholding (FIT) | IRC § 105(b), § 106(a), § 125(a) | Pre-tax deduction from gross wages | Excluded from Box 1 (Wages) |
| Social Security (FICA - 6.2%) | IRC § 3121(a)(2)(B) | Exempt from Social Security tax | Excluded from Box 3 (SS Wages) |
| Medicare (FICA - 1.45%) | IRC § 3121(a)(2)(B) | Exempt from Medicare tax | Excluded from Box 5 (Medicare Wages) |
| Federal Unemployment (FUTA - 0.6%) | IRC § 3306(b)(2)(B) | Exempt from employer FUTA liability | Excluded from taxable FUTA base |
| State Unemployment (SUTA) | Conformity with IRC § 3306 | Exempt from employer SUTA liability | Excluded from state wage base |
| State Income Tax (SIT) | State Conformity with IRC § 125 | Pre-tax deduction from state wages | Excluded from Box 16 (State Wages) |
By reducing taxable payroll across 353 enrolled W-2 staff, the employer recaptures 7.65% in payroll taxes ($600.00+ annually per participating employee), generating substantial financial savings that fund the in-house administrative fee and enhance employee benefits.
Pursuant to IRS substantiation guidelines and the retail pricing catalog on file, the fair-market consumer retail value of the clinical and life insurance benefits provided to employees of Chroma Early Learning Academy LLC dramatically exceeds wholesale provider costs:
| Benefit Description | Clinical & Underwriting Carrier | Independent Consumer Retail Worth | Fair Market Source |
|---|---|---|---|
| Apex-MEC™ Clinical Preventive Care 63+ ACA § 2713 screenings, annual physicals, preventive labs |
Apex-MEC / MultiPlan PHCS Network | $95.00 – $140.00 / month | Commercial ACA Preventive Benchmark |
| Elective 24/7 Urgent Care & Virtual Mental Health Board-certified virtual physicians and licensed counselors |
Clinical Telehealth & Mental Health Network | $55.00 – $90.00 / month | Commercial Telehealth / EAP Benchmarks |
| $50,000 Guaranteed Issue Group Life Underwritten by ManhattanLife Insurance Co. |
ManhattanLife Insurance Company (IRC § 79) | $18.00 – $35.00 / month | Commercial Retail Term Rates (Age 35-50) |
| TOTAL BENEFIT PACKAGE DELIVERED | Fully Insured Master Carrier Policies | $168.00 – $265.00 / month | Statutory Safe Harbor Satisfied |
Effective Date: January 1, 2026
Plan Sponsor (Client): Chroma Early Learning Academy LLC (EIN: 58-2940191)
Contract Administrator: Shielded Horizons LLC, 3554 Old Milton Pkwy, Alpharetta, GA 30005
1. Ministerial Delegation: Pursuant to ERISA Section 3(16)(A) and 29 CFR § 2509.75-8 (D-2), Employer designates Shielded Horizons LLC as Contract Administrator to perform ministerial eligibility verification, census intake, two-column payroll deduction mapping, direct carrier premium pass-through remittances, and non-discrimination testing.
2. Operating In-House: Employer designates Shielded Horizons LLC to execute administration in-house without engaging an outside commercial TPA.
3. Compensation: Plan administration and ministerial execution fees are authorized pursuant to the approved Fee Schedule, fully funded out of corporate payroll tax recapture and plan operations with zero net out-of-pocket cost to the employer or employees.
Shielded Horizons LLC warrants full compliance with the HIPAA Security and Privacy Rules, implementing administrative, physical, and technical safeguards for employee protected health information (PHI), and guaranteeing 24-hour breach notification.
Entity Name: Chroma Early Learning Academy LLC
Federal Tax EIN: 58-2940191
Date of Action: January 1, 2026
UNANIMOUS WRITTEN CONSENT OF MANAGING OFFICERS:
"WHEREAS, it is in the best interests of Chroma Early Learning Academy LLC and its employees to establish a Section 125 Flexible Benefits Plan and Self-Insured Medical Reimbursement Plan (Plan 501);
NOW, THEREFORE, BE IT RESOLVED, that the Company hereby approves and adopts Plan 501 effective for the 2026 Plan Year;
FURTHER RESOLVED, that the officers of the Company be authorized to execute the formal Written Plan Document and designate Shielded Horizons LLC as ministerial Contract Administrator / In-House ASO Provider under ERISA Section 3(16)(A);
FURTHER RESOLVED, that the Company's payroll department and processors be authorized to execute pre-tax salary reductions pursuant to signed employee election agreements."
"I hereby elect to participate in the Chroma Early Learning Academy LLC Section 125 Plan for the 2026 Plan Year. I authorize pre-tax salary reductions to fund my statutory benefits, balanced by my non-elective employer flex credit. I understand this election cannot be changed during the Plan Year except upon a recognized Qualifying Life Event."
"I agree to participate in the Annual Participatory Wellness Program administered by Shielded Horizons LLC. I understand I have full access to Apex-MEC Clinical Preventive Care and screenings at $0 copay. Participation is entirely voluntary and is available to all eligible employees regardless of health status."