Section 125 for Orangetheory Fitness Franchise Operators
By David Newman · Referral Partner, Section 125 Savings · San Pedro, CA
A wellness brand. A wellness benefits structure. The fit is structural.
Orangetheory Fitness is already a wellness brand. Section 125 Preventive Care is the financial extension of what you already stand for — a structural employee-wellness benefits package funded by federal tax structure rather than out-of-pocket payroll. For Orangetheory operators, the alignment between brand and benefits is clean.
Most Orangetheory franchises run 12-25 W-2 staff per location (front desk, sales associates, full-time coaches, manager). The salary mix typically lands in the $28K-$60K range. Combined FICA + WC math at the per-location level: $14,000-$28,000/year.
See What You'd Save
5 quick questions · instant estimate · no email required
Minimum 10 W-2 employees · $25K+ salary · ACA-compliant health coverage required
Verified by CBIZ & HitesmanLaw · Zero cost · Zero obligation
How it works for Orangetheory Fitness operators
On a 20-employee Orangetheory location, Section 125 Preventive Care delivers $13,632/year in net employer FICA savings (20 × $681.60) + estimated $5,760/year in WC reduction at the fitness 4% rate. Combined: ~$19,400/year. 20 staff members each take home $863/year additional ($17,260/year of additional staff compensation).
For multi-location Orangetheory operators (regional developers often run 5-15 studios), savings cross six figures. The wellness benefits package is operationally consistent with Orangetheory's brand — telemedicine, mental health counseling, and prescription savings extend the OTF wellness ethos beyond the workout floor.
Want to model your specific footprint? Use the Multi-Location Calculator → for combined savings across all your Orangetheory Fitness locations.
Closest case study analog: Avant-garde Senior Living / Restaurant Group
Our company achieved substantial annual savings exceeding a quarter million dollars in both FICA and workers' compensation. Employees enjoyed extra money in their pockets each month.
Verified by the Best in the Country
Skepticism is the right response. We don't ask you to take our word for it — we bring institutional proof that convinced CPAs, CFOs, attorneys, and insurance brokers to enroll their own companies.
Darcy L. Hitesman, J.D.
35+ years as an Employee Benefits attorney specializing in IRC Section 125, ERISA, HIPAA, and the ACA. Her May 5, 2025 opinion letter concludes: “In this firm's opinion, the Program described satisfies applicable IRS requirements.”
She specifically reviewed the IRS Chief Counsel Advice memoranda on "double-dip" arrangements — the exact schemes the IRS has flagged — and concluded this program is built differently and compliantly.
CBIZ Advisors LLC
CBIZ independently reviewed the program against IRC §§ 125, 105, and 106, plus ERISA, ACA, and COBRA requirements. Their August 22, 2025 letter concludes: “If operated per its provisions, the Program appears to satisfy the requirements of ERISA, the ACA, and COBRA as well.”
This review was commissioned by Affinity Hospice's CEO before enrolling his nationwide organization — and the CFO (himself a CPA) shared the letter publicly in his testimonial.
Direct From the U.S. Government
Section 125 has been in the Internal Revenue Code since 1978. Congress wrote it there specifically to encourage employers to fund preventive healthcare for American workers. This is not a loophole — it is the precise, intended use of a 47-year-old federal law, grounded in IRS Revenue Ruling 69-154, the specific published ruling supporting the benefit payment structure.
→ Verify on IRS.gov — Section 125 Cafeteria Plans ↗Questions specific to Orangetheory Fitness franchises
Content reviewed by Virginia Fish, CPA — tax and employer benefits specialist with 10+ years in financial reporting and payroll tax strategy.
Find Out Your Number.
Free. No Pitch. Just Math.
Verified: CBIZ Advisors LLC (Aug 2025) · HitesmanLaw P.A. (May 2025)
$500K legal protection per enrolled employer · IRS Section 125 · Federal law since 1978