Spend and save.
That’s right, you and your employees save tax dollars when they allocate benefits dollars.
Put the tax code to work for you and increase the overall value of your company’s benefits package. Governed by Section 125 of the Internal Revenue Code, and also known as “cafeteria plans,” Flexible Spending Accounts (FSAs) can represent substantial savings for you and your employees.
Internal Revenue Code 125 allows employers to offer three types of plans:
Premium Only Plan (POP)
Employees can use pre-tax dollars to pay medical, dental, and vision insurance premiums.
Dependent Care Plan
Employees can set aside pre-tax funds from their salaries in special accounts to pay for childcare, elder care, summer day camp and care for a disabled spouse or dependent.
Unreimbursed Medical Plan
Employees can set aside pre-tax funds from their salaries in special accounts to pay for expenses not covered by health insurance, such as co-pays, deductibles, dental expenses, vision care costs, prescriptions and chiropractic fees.
Health Reimbursement Arrangement (HRA)
HRAs have become increasingly popular due to the rising cost of health care premiums. Because HRAs are flexible, employers can purchase higher deductible health plans with significant premium savings. They then self-fund a portion of the high deductible (or benefits) with an HRA so employees don’t feel the burden of the high deductible plan.
Commuter Benefits (Section 132)
Commuter benefits are an employee benefit plan that allows you to set aside a portion of your gross salary to pay for work-related parking and mass transit expenses on a pre-tax basis.
Health Savings Account (HSA)
You and your employer can deposit money into your HSA for current and future medical expenses. You can then use the HSA funds to pay for insurance deductibles and medical care/supplies not typically covered by medical insurance, such as dentistry, ophthalmology, and more.