The federal government allows businesses to provide an exciting benefit to employees under Section 125 of the Internal Revenue Code.  It assists employees with the cost of group health insurance, unreimbursed medical expenses and child care or dependent care expenses.

A Section 125 Plan can be as simple as allowing employee contributions to a company-sponsored health insurance program to be made on a pre-tax basis.  Or, it can include establishing reimbursement accounts for medical and dependent care expenses.   EASi can assist you in establishing a Section 125 plan for your employees.  If you already have such a plan in place, we can fully administer it at a very competitive cost.

One of the best features of our program is that you can select your own insurance coverage for the plan. 

Section 125 (Cafeteria) Plan

There are essentially three parts to a comprehensive Section 125 plan:

At the very least, an employer who provides health insurance in which the employee contributes to the premium should also provide a POP.

Benefits of a 125 Plan

A well-designed plan can provide both the employer and employees with money saving benefits.  By making contributions on a pre-tax basis, an employee does not have to pay federal, state or social security taxes on the money.  The employer is exempt from paying its share of employment tax on the same amount.  These tax-saving features can actually provide the employee with more take-home pay and can reduce the employer's overall tax liability!

With rising costs of health insurance and health care, a Health Flexible Spending Account (Health FSA) can be useful in obtaining health services that might not be covered or offered.  For example, many health insurance plans do not cover eye exams or eyewear.  By using funds from a Health FSA, an individual can realize a savings on the purchase of contact lenses because of the tax savings

A Dependent Care Flexible Spending Account can assist with the cost of child care or care of another dependent when an individual works.   The resulting tax savings can be significant, and is much easier to realize than with deductions on income tax returns.

Health Reimbursement Arrangements (HRA's)

A group insurance plan with a high deductible amount can be supplemented with an employer funded Health Reimbursement Arrangement (HRA).  This type of program can be set up in many ways to help offset the higher deductible costs an employee will have.  The cost of such a plan for the employer is offset by the overall premium reductions found in a high deductible plan.  

The EASiflex Program

EASi provides a complete program for implementing and administering a Section 125 Plan to include:

If you already have an established Section 125 benefit plan, we can usually assume the administrative responsibilities at minimal cost.  Or, we can help you with amending an existing POP to include medical and dependent care benefits.

Home     Who are we?  Our clients   Employment Services  Medical Practice Resources  Payroll   Human Resources  Workers' Comp        Employee Benefits  Other Services  Consulting   EASiflex  EASiscreen  EASidirect   Contact Us 

Send mail to easi@easihr.com with questions or comments about this web site.
  © 2009 Employer's Administrative Services of Indiana, L.L.C.