Cafeteria/Section 125
A Cafeteria Plan can reduce taxes for both the employee and employer.
Key Benefits
- Expenses that employees pay for health insurance, medical expenses not reimbursed by insurance and dependent care are exempt from state and federal income tax
- Wages used to pay the expenses described above are also exempt from FICA and Medicare taxes
- Employer's share of FICA and Medicare taxes are also reduced
Capabilities
- Plan Design
- We review each plan provision to help the client understand the options available and the implications of each.
- Implementation
- We prepare the plan document, Summary Plan Description and specimen Board Of Directors Resolution adopting the plan. We also provide explanations of benefits to employees and forms for employees to make various elections and designations.
- Ongoing Administration
- The ongoing administration of the plan includes discrimination testing, maintenance of employee accounts, issuing reimbursement checks, and preparation of the IRS form 5500 filing. We continually monitor the operation of the plan to insure that it continues to maintain its qualified status even when the requirements change.