Cafeteria Plans

Section 125 Planssection-125-plans

Cafeteria Plans, also known as “Flexible Benefit Plans,” are made possible by Section 125 of the IRS code dealing with the tax-exempt status of certain employee benefits.

The bottom line is that employees can select a combination of benefits that best suit their individual needs and pay for them using pre-tax dollars.

Want to learn more? Contact Benefits Network today!

How Cafeteria Plans Benefit Your Company and its Employees

Customized Individual Coverage

Each employee has unique health insurance needs based on their age, marital status, family health history and a host of other factors.

By offering your workers a Cafeteria Plan, they can choose exactly the types of coverage that they need most – on either a pre-tax or post tax basis. Those choices may include:

  • Health and accident benefits
  • Adoption assistance
  • Dependent care assistance
  • Health savings accounts
  • Group life and many other options

Pre-Tax Premiums save Employees Money

Because Section 125 Cafeteria Plans include benefits that are eligible to be paid for with pre-tax income, employee net income will be reduced as will their taxable income.

Lower Withholding Saves the Company Money

Because a Cafeteria Plan allows employees to pay for benefits with pre-tax income, their take-home pay – and therefore the amount of their government withholding- is reduced. The employer saves on taxes, too.

Improve Recruitment & Retention

As with every item in your employee benefit portfolio, generous benefit packages are a significant factor in recruiting and Retaining top-notch employees.

Contact Benefits Network today! Let us help you determine if a Cafeteria Plan is right for your business and your employees.