Every Employee Qualifies.
Every Single One.
River Bridge Consulting now offers Section 127 Educational Assistance Plans through AvelWell — a second, independent tax savings stream that works for every W-2 employee, regardless of whether they participate in your Section 125 plan. 45 financial, career, and personal wellness tools. Employer-funded. Zero cost to employees.
Illustrative estimates only — not tax or legal advice. AvelWell is a technology platform operated by 2ones LLC. Employers should confirm specifics with a qualified tax professional.
A 47-Year-Old Tax Provision.
Finally Available to Every Employer.
Section 127 of the Internal Revenue Code allows employers to provide up to $5,250 per employee per year in educational assistance benefits — completely tax-free to employees, and a fully deductible business expense for the employer.
The most important thing to understand: unlike the Section 125 preventive healthcare plan — which depends on employee wage levels and participation structures — Section 127 has no income exclusions, no participation thresholds, and no open enrollment window. The employer enrolls all eligible W-2 employees automatically. Every single one qualifies from day one.
Congress enacted Section 127 in 1978 and has permanently extended it multiple times — most recently in the One Big Beautiful Bill Act (P.L. 119-21, July 4, 2025), which also indexed the $5,250 annual cap for inflation starting in 2027. This is not a new or experimental provision. It is a permanently established part of the tax code that is only now accessible at the small and mid-size employer level for the first time.
Two Strategies. Two Different Jobs.
One Fills the Gap the Other Leaves.
If you're running a Section 125 plan, you're already capturing significant payroll tax savings — but not every employee qualifies. Section 127 fills exactly that gap, and then some.
Preventive Healthcare Plan
Educational Assistance Plan
Section 125 covers the employee's body.
Section 127 covers everything else.
When you run both together, you cover the whole employee — physical health, financial stress, career growth, and personal wellness. You leave no employee behind. And you generate two completely independent tax savings streams on different pools of money, at the same time.
Why the Two Plans Work
Better Together
The Section 125 plan and the Section 127 plan are completely independent — different IRC sections, different wage pools, different timing. Running both generates two separate tax savings streams simultaneously without one reducing the other.
Two Independent Tax Savings Streams
Section 125 reduces employee taxable wages generating FICA savings. Section 127 directly excludes the benefit amount from FICA and FUTA, plus generates a full Section 162 business deduction. Adding Section 127 does not reduce your Section 125 savings in any way.
No Employee Left Behind
Some employees may not qualify for full Section 125 participation due to wage structures. Section 127 covers every single one of them — automatically enrolled, no exceptions. Together, your entire workforce has a complete benefit package.
Different Benefits — No Overlap
Section 125 covers healthcare employees need — virtual care, prescriptions, mental health. Section 127 gives employees tools they actively seek — financial wellness, career development, personal growth. No overlap. Pure addition to the employee experience.
Section 125 Effectively Pays for Section 127
For a 50-employee organization, the Section 125 plan generates approximately $56.80 net savings per employee per month. AvelWell's effective net cost after tax savings is approximately $18.11 per employee per month. The Section 125 savings more than fund the entire Section 127 program — with money left over.
Preventive Healthcare Plan
Reduces employee taxable wages · Generates employer FICA savings · $0 healthcare for enrolled employees · Works alongside existing major medical
Educational Assistance Plan
Every employee automatically enrolled · 45 wellness tools · FICA + FUTA + Section 162 savings · Zero employee cost · Full compliance included
60 Tools. Three Programs.
One Benefit Your Employees Will Actually Use.
AvelWell delivers three distinct benefit programs under the Section 127 educational assistance framework — covering the three areas of life that drive the most employee stress, disengagement, and turnover.
- Smart Budget — automated spending analysis & personalized monthly budget
- Debt Payoff — avalanche vs. snowball strategies & fastest path to debt freedom
- Retirement Readiness — retirement income projection, gap analysis & contribution modeling
- Credit Health Assessment — credit profile analysis & improvement tracking
- Student Loan Optimizer — repayment strategy comparison & forgiveness timeline
- Financial Independence Calc. — FI number calculation & savings milestones
- Tax Savings Calculator — optimize Section 127, HSA, FSA & retirement contributions
- Emergency Savings, Insurance Gap Analyzer, Paycheck Allocator
- Skills Assessment — 21-competency evaluation across professional & technical skills
- Career Pathing — career trajectory modeling & advancement planning
- Salary Negotiation — market rate research & interactive negotiation simulation
- LinkedIn Optimizer — full profile audit, keyword analysis & visibility strategy
- Resume Builder — ATS-optimized creator with keyword gap analysis
- Interview Prep — behavioral response frameworks & practice simulation
- Leadership Assessment — 5-style leadership analysis & development guide
- Mentorship Planner, Networking Planner, Personal Brand Builder
- Life Wheel — 8-domain life satisfaction assessment & balance action plan
- Stress & Resilience — APA evidence-based stress assessment & management
- Emotional Intelligence — 4-domain EQ measurement (Goleman model)
- Habit Builder — science-based habit formation using Clear/Duhigg frameworks
- Mindfulness — evidence-based cognitive performance & stress reduction curriculum
- Sleep & Recovery Science — sleep quality improvement & recovery optimization
- Positive Psychology — Seligman PERMA wellbeing assessment & 21-day module
- Values & Purpose, Goal Tracker, Energy Management
Everything Your Compliance Team Needs — Built In
Section 127 written plan — created and managed for you before activation
Payroll exclusion reports — delivered to your payroll provider every pay period
Non-discrimination monitoring — annual compliance report included
W-2 Box 14 reporting support — no manual tracking required from your team
Employee SPD & notification kit — ready on day one, delivered to employees
Annual § 6039D compliance package — full regulatory documentation covered
198 curated educational resources — across 11 categories including leadership, digital literacy, and languages
Setup in 20 minutes — live before your next pay period. No HR department required
30-day money-back guarantee — full refund if not satisfied, no questions asked
How the Numbers
Actually Work
A side-by-side view of what Section 125 and Section 127 deliver together for an illustrative 50-employee organization.
Illustrative estimates only — not tax or legal advice. Results vary by employer size, wage levels, participation, tax rate, and state. Confirm specifics with your tax professional.
| Section 125 | Section 127 (AvelWell) | Combined Bundle | |
|---|---|---|---|
| Employer cost / month (50 employees) | ~$0 net | $1,400 | $1,400 |
| FICA / FUTA savings / month | +$2,840 | +$144.50 | +$2,984.50 |
| Section 162 business deduction value | Not applicable | +$350 | +$350 |
| Effective net cost after tax savings | ~$0 net | $905.50 | $905.50 |
| Employee take-home pay impact | +$71.96/mo per employee | Unchanged | +$71.96/mo per employee |
| % of employees who qualify | May vary by wage level | 100% — every W-2 employee | 100% covered together |
| Net employer position / month | +$1,208 | -$453 | +$1,934 |
| Net employer position / year | +$14,500 | -$5,433 | +$23,214 |
Section 125 is effectively self-funding
The FICA savings generated by the Section 125 plan are typically large enough to fully cover the cost of running the plan. The employer's net cost is approximately zero while employees receive $0 healthcare benefits on every paycheck.
AvelWell reduces its own cost by 33¢ per dollar
At $35 PEPM, the FICA/FUTA exclusion and Section 162 deduction combine to return approximately $11.64 per employee per month — reducing the effective net cost to $23.36 PEPM. No other wellness platform generates a tax offset on its own cost.
The two savings streams are completely independent
Section 125 and Section 127 operate on different IRC sections, different dollar pools, and different timing. Adding AvelWell does not reduce your Section 125 savings in any way. They are genuinely additive.
The S125 savings comfortably fund AvelWell
Because Section 125 generates ~$56.80 net savings per employee per month and AvelWell costs ~$18.11 net per employee per month, the Section 125 savings more than pay for the entire Section 127 program — with savings remaining.
Employer FICA Savings
Repeating every single pay period
Employees Win Too
45 tools, zero cost to them
Why Haven't I
Heard of This Before?
It's the most common question — and it deserves an honest answer. Section 127 has existed in the tax code since 1978. Here's why most employers are only hearing about it now.
It was designed for Fortune 500 companies
When Congress enacted Section 127 in 1978, it was used by large corporations with dedicated HR departments, benefits attorneys, and payroll teams. Running a compliant plan historically required custom legal work, custom payroll codes, and annual compliance administration — overhead that was prohibitive for any employer under 500 people. The benefit existed in the tax code. The infrastructure for small employers did not.
No platform existed to run it at the SMB level
Until AvelWell, there was no off-the-shelf platform that combined Section 127 plan administration with an employee-facing benefit that employees would actually use. The options for small employers were expensive do-it-yourself or go without — and 99% went without. AvelWell is the first platform built specifically to activate Section 127 for employers with 10 to 499 employees, handling all compliance automatically.
CPAs and advisors were never trained on it
CPA training programs focus on benefits their clients actually use. Because almost no small employer was running a Section 127 plan, the topic never made it into mainstream practitioner education. Most CPAs know it exists in theory — it's in the Internal Revenue Code — but have never advised a client on implementing one. This created a self-reinforcing cycle: no clients use it because no advisors recommend it; no advisors recommend it because no clients are asking.
Payroll platforms never built the infrastructure
Major payroll platforms — including ADP Run, which serves approximately 700,000 small businesses — do not have a native, purpose-built earning category for Section 127 wage exclusions in their self-service interfaces. The category simply doesn't exist in the dropdown. Not because the benefit is invalid, but because no standardized taxonomy existed for payroll platforms to build against. That standard is being established now.
It has been hidden in plain sight for 47 years
Section 127 has been permanently extended by Congress multiple times — most recently in the One Big Beautiful Bill Act (P.L. 119-21, July 4, 2025), which also indexed the $5,250 cap for inflation starting in 2027. Congress clearly believes in this benefit enough to strengthen it. The problem was never the law — it was the absence of a simple, affordable platform to make it accessible. That platform now exists.
The employers who act first gain a real advantage
The employers who engage with AvelWell today are not early adopters of a risky new idea. They are early adopters of a 47-year-old tax provision that is only now accessible at the SMB level for the first time. The legal foundation is established. The compliance infrastructure is built. The platform is live. The only thing that has changed is that the barrier to entry has been eliminated.
Why Right Now Is the Right Time
When Section 127 becomes mainstream — and the infrastructure trajectory suggests it will — the employers who are already running plans will have years of compliance history, employee engagement data, and established vendor relationships. The ones who wait until "everyone is doing it" will be starting from zero in a more competitive talent market.
The employers and brokers who discover this first are gaining a genuine first-mover advantage in a space where almost no competition exists yet. River Bridge Consulting is one of the first benefits consultants in the country to bring this to employers. That window won't stay open indefinitely.
The Employee Benefit That
Pays for Itself
Starting at $20 per employee per month. Save 20% with annual billing. Setup included. Live in as little as 20 minutes.
River Bridge Consulting is an authorized representative for the AvelWell Section 127 platform. Visit avelwell.com to learn more about the platform — or book a strategy call with Nancy below to get a personalized walkthrough for your specific organization.
🌐 Visit AvelWell →
Illustrative estimates only — not tax or legal advice. AvelWell is a technology platform operated by 2ones LLC. Actual results vary by employer. Employers should confirm specifics with a qualified tax professional. River Bridge Consulting is an authorized representative for the AvelWell platform.