Section 125 plans
also allow employees to make before-tax contributions to personal spending accounts that can be used for qualifying health-care or child-care expenses.
Employees are free to pay their own premiums through after-tax payroll deduction, but if workers' wages are run through a Section 125 plan
, by definition they convert to implicit employer contributions.
Employers who do offer a Section 125 plan
must meet state requirements, including paying at least 33 percent of the premium.
Rashke is Chief Executive Officer of Total Administrative Services Corporation (TASC), an employee benefits company that develops and markets Section 105 Plans, Section 125 Plans
, pension plans and financial aid planning to small business owners.
The Tax Reform Act of 1986 did nothing to alter their tax advantages; in addition, the Budget Reconciliation Act of 1987 did not follow through on earlier threats to cap Section 125 plan
50 per employee, for up to 50 employees, to any uninsured employer that establishes a section 125 plan
covering employees' insurance premiums.
In the public sector, Section 125 plans
have been used mainly to establish tax-free benefits that are financed entirely by employees through salary reduction.
With a properly designed Section 125 plan
, you can demonstrate substantial cost savings through reduced payroll taxes plus reduce personal income taxes for employees.
At the same time, regulations governing Section 125 plans
have become more restrictive as the need for benefit restructuring has extended beyond welfare benefits to retiree benefits, including retiree medical.
com), a national leader in payroll processing and an Internet payroll pioneer, is pleased to introduce Power125, PayMaxx's new program for Section 125 plan
As part of the agreement, M3 will offer PayMaxx's payroll processing services as well as additional services such as time and attendance, paycard, Abra HR management systems, manager self-service, and 401(k) and Section 125 plan
A Section 125 Plan
allows employees to pay for eligible insurance premiums, out-of-pocket health expenses (deductibles and co-insurance) and dependent care with pre-tax dollars, reducing employee's income tax and employer payroll tax.