Potential Savings for Employers & Employees
What is a Section 125 plan? How does it work? And, how is it different from other health benefit plans? Section 125 plans, otherwise known as cafeteria plans, help save money, potentially for both employees and employers. With a few different characteristics than your typical health benefits coverage, Section 125 plans are worth looking into.
Any employee can participate in a Section 125 plan, as well as dependents. This plan allows employees to receive benefits by deducting insurance premiums, pre-taxed. Section 125 plans are generally exempt from federal and state income taxes; therefore, employees take home more money. Employees can also use pre-taxed funds, previously set aside, to pay for qualified medical expenses or taxable benefits. Some qualified benefits listed on the IRS website include:
- Accident and health benefits
- Adoption aid
- Dependent care assistance
- Group-term life insurance
- Health savings accounts
BenefitMall is aware that each company has different needs, and it’s our intention to meet those needs. That is exactly why we offer assistance with setting up your Section 125 plan, as well as several other health benefit plans. If you have any questions, please feel free to send them our way so we can get you the answers you are looking for.