Common Questions About CCA 202323006 and Wellness Program Compliance
These questions address the most common concerns CFOs, tax advisors, and benefits professionals have about IRS Chief Counsel Advice 202323006 and its implications for wellness program tax treatment.
CCA 202323006 is an IRS Chief Counsel Advice memorandum released on June 9, 2023. It addresses the tax treatment of wellness indemnity payments under employer-funded, fixed-indemnity insurance policies where premiums are paid entirely through pre-tax salary reduction under a Section 125 cafeteria plan.
The memo concludes that in the specific fact pattern analyzed, wellness benefits are includible in gross income and subject to FICA, FUTA, and federal income tax withholding.
No. Under IRC §6110(k)(3), Chief Counsel Advice memoranda "may not be used or cited as precedent."
CCAs represent the IRS position in specific cases but do not have the force of:
A CCA is internal IRS guidance that provides insight into how the IRS analyzes certain issues, but it does not establish binding rules for taxpayers.
No. CCA 202323006 specifically addresses a structure where:
The memo does not analyze or address dual-premium structures where Section 125 pre-tax funding covers qualified benefits (MEC, etc.) and a separate after-tax premium funds wellness benefits.
When wellness premiums are paid with after-tax dollars, IRC §104(a)(3) applies, and benefits are excludable from gross income—a principle the IRS has never disputed.
Yes. Section 125 cafeteria plan FICA savings from pre-tax premium funding for qualified benefits have been established law since 1978. This mechanism is codified in IRC §3121(a)(5)(G) and has never been challenged by the IRS.
CCA 202323006 addresses only the treatment of wellness benefits paid from pre-tax funded policies—it does not challenge the underlying FICA savings from pre-tax premium deductions for qualified medical benefits.
The memo states that the Section 104(a)(3) exclusion "does not apply" if amounts are "attributable to contributions by the employer that were not includable in the gross income of the employee."
The inverse is equally important: When premiums ARE paid with after-tax dollars (which ARE includable in gross income), Section 104(a)(3) DOES apply, and benefits ARE excludable.
This principle—affirmed in CCA 201703013 and never disputed—is the foundation of compliant dual-premium structures.
As of January 2026, there are no publicly reported:
The IRS included similar language in proposed ICHRA regulations in 2024, but those provisions were withdrawn before finalization. Treasury has repeatedly requested Congressional action to change the law—an acknowledgment that current law supports after-tax funded benefit exclusions.
The full text is available:
The PTE Gold Book provides comprehensive analysis of CCA 202323006, all related IRS guidance, and specific compliance frameworks for Section 125 payroll tax reduction programs.