FLEXIBLE BENEFITS
Flexible Benefit Plans, created by legislation in 1978 (Internal Revenue Service, Section 125), and the employee benefit program were designed using the concept of choice. Also known as Cafeteria Plans, they provide the ability of each eligible employee to select levels of benefits that meet their individual needs.
Flexible Benefit
Plans can help employers contain benefit costs, meet diverse employee
needs through choice, increase employee satisfaction and improve morale,
generate substantial tax savings for both the employer and employees,
provide a framework in which your benefit can evolve to keep pace with
changing needs. Through employer credits and/or salary "redirection,"
employees purchase "qualified benefits." Qualified benefits
are benefits that may not be included in the employees' gross income.
A fund is established to pay eligible expenses for the participating employees.
Section 125
allows payment of benefits for employer-sponsored group health insurance
premiums, unreimbursed medical expenses, and dependent care assistance
expenses. Qualified benefit payments are received by the Participant through
credits and/or salary redirection. Before…
- FICA taxes
- State Income Taxes (not all states)
- Federal Income Taxes
Flexible Benefit Plan costs can be paid by a wide variety
of choices. Both employer and employee contributions may be used. Methods
of payment include automatic employee credits, benefit trade off credits,
life style credits, matured credits, non-taxable salary conversion, and
taxable payroll deductions.
PLAN DESIGN AND DESIGN SERVICES
When designing a Cafeteria Plan it is essential to first set the plan objectives. We have found great success in Plan design when the functional approach is used. Igoe & Company Incorporated offers full design services, including the design of the COBRA Plan, development of the employee communication materials and explanation of the benefits to employees using education seminars and enrollment meetings. When using the functional approach, Plan Design issues should be evaluated and assessed by Employee Needs, Classification of Employees, and Current Benefit Structure. Igoe & Company Incorporated will assist you in the Plan Design process making sure the Plan Design dove tails with the administration of the Plan. Further, Igoe & Company Incorporated will work with your Human Resources specialist, should you need assistance, in Fully Flexible Benefit Plan Design. These Plans, sometimes called Full Cafeteria Plans, offer benefit credits to Plan Participant and allow each employee to purchase the exact level of benefits they want.
ADMINISTRATIVE SERVICES
Igoe & Company Incorporated provides the most up-to-date systems available for Plan Administration. We design the administration system individually for each client. Our services include:
- Reimbursement processing weekly, biweekly, or semimonthly check registers and monthly management reports
- Non-discrimination testing
- Telephone and Facsimile hotline service for Participant questions (toll free number)
- Prepare Form 5500 for mailing to the Internal Revenue Service
- Preparation of calculations necessary to assist employer in filing of W-2 dependent care expenditures
- Additional services include Direct Reimbursement Dental and Vision Plan Administration.
Igoe
& Company Incorporated…
Committed to excellence and integrity
in Benefit Plan Consulting and Administration
