Section 125

Benefits Plus, Inc. presents . . .

Premium Pretax Plans
The Internal Revenue Service Code Section 125 allows employees and employers to reduce the amount of their taxes by taking reductions through payroll for medical and dental plans on a pretax basis. This enables the employee to save money on the FICA, Federal, and State taxes, and the employer to reduce the amount of money needed to match the FICA taxes. Benefits Plus can design your plan and enrollment forms for premium pretax plans.

Flexible Spending Accounts
Benefits Plus can also help to coordinate your flexible spending accounts. Flexible spending accounts allow employees to pay for their out-of-pocket health care and dependent daycare expenses on a pretax basis. This is done by allowing employees to estimate the amount of money that they will spend for qualified services at the beginning of the year. Each week a portion of this amount is deducted from the employee's paycheck before taxes and put into a reimbursement account. The employee can then request reimbursements from that account as needed.

Full Cafeteria Plan
With this type of plan, the employer gives each employee a specific amount of credits towards his/her benefits. The employees then choose the benefits they would like to participate in and use their credits towards these coverages. Any leftover amounts can be paid to the employee in the form of compensation, and any additional amounts that must be paid by the employee can be deducted from their paycheck on a pretax basis.

All of these plans provide tax savings to the employee and the employer, and Benefits Plus can help your company to determine which type of plan would best suit your needs.