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Products -- Cafeteria Plans & Section 125

Section 125 relates to plans using pre-tax dollars to pay premiums for group benefit plans.

Section 125 plans can be offered in various benefit formats.

The three types of benefits available under Section 125 programs include:

• Premium Plan Only (POP) - allows employees to use pre-tax dollars to make their contributions through employer-sponsored health and term life insurance plans. Employees electing to use Section 125 benefits realize reduced taxable income based on the amounts contributed.
• Flexible Spending Accounts (FSA) - allows an employee to use pre-tax dollars to pay dependent care expenses and medical expenses not covered by their group insurance plan. An FSA plan can cover out-of-pocket expenses such as day care, copays, prescription drugs, medical deductibles, eyeglasses, and contact lenses.
  
  In addition to reimbursement for out-of-pocket expenses indicated above, a Flexible Spending Account (FSA) can include expenses associated with dependent care, such as:
  • Care for a child under the age of 13
  • Care for a disabled spouse or dependent incapable of caring for themselves
  • Home-related services (such as a visiting nurse)
• Full Cafeteria Plan - If employers were to offer a variety of benefit options to their employees, the employee may select one or more of these options using employer-provided dollars to cover all or a portion of selected plan costs. Monies not used for benefits will be included in the employee's taxable income for the year. These plans are often best suited for the larger sized companies.

Dimensions Incorporated will find the programs that meets your financial requirements as well as the needs of your employees!