WHAT IS A FLEXIBLE BENEFIT/CAFETERIA PLAN?
An employee benefit program based on the concept of choice. Cafeteria plans provide the ability to each employee to select the benefits to meet their individual needs. IRC 125 allows payment of benefits for:
- Employer sponsored group health insurance premiums
- Un-reimbursed medical expenses
- Dependent care assistance expenses
WHY ARE FLEX PLANS BECOMING SO POPULAR?
The present traditional programs are giving rise to:
- Declining employee satisfaction
- Ever-increasing costs
WHAT ARE THE ADVANTAGES OF A FLEXIBLE BENEFIT PLAN?
- Contain benefit costs
- Meet diverse employee needs through choice
- Generate substantial tax savings for both the employer and employees
- Increase employee satisfaction and improve morale
- Provide a framework in which your benefit plan can evolve to keep pace with changing needs
HOW DOES A FLEX PLAN WORK?
Through employer credits and/or salary “redirection”, employees purchase “qualified benefits”.
WHAT IS A “QUALIFIED BENEFIT”?
Qualified benefits are benefits not included in the employees’ gross income. A fund is established to pay eligible expenses for the participating employees.
HOW DO THE BENEFITS BECOME “TAX FREE”?
Qualified benefit payments are received by the participant through credits or salary redirection. Before…
- FICA Taxes
- State Income Taxes (not all states)
- Federal Income Taxes
WHAT BENEFITS CAN BE OFFERED THROUGH A FLEX PLAN?
NON-TAXABLE
Medical and Disability Plans
Accident and Health Plan
Dependent Care Plan
Group Life (up to $50,000)
401(k) Plans
Dental Plans
Vision Plans
Un-reimbursed Medical Expenses
Vacation Days
TAXABLE
Cash
Group Term Life (over $50,000)
Group Auto Insurance
Financial Planning Services
IGOE & COMPANY INCORPORATED PROVIDES THE FOLLOWING SERVICES:
- Provide plan documents for counsel’s review
- Design and implement flex credit systems
- Effectively communicate the plan and its operation to employees
- Hold enrollment meeting(s)
- Provide summary plan descriptions
- Handle deposits and disbursements
- Prepare annual filing form 5500
- Perform non-discrimination testing
- Provide annual reports for employer
- Provide employee status reports on each reimbursement account
IGOE & COMPANY INCORPORATED…PROVIDING YOU AND YOUR EMPLOYEES CHOICE WITHOUT COMPROMISE.
