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Section 125 Cafeteria Plans

Section 125 Cafeteria Plans in South Portland, ME

Employers establish a menu of benefits by electing to offer group health or accident insurance, group term life insurance, disability benefits, dental insurance, vision insurance, or voluntary benefits.

Cafeteria Plans provide participants a variety of money saving options!

What are Cafeteria Plans? 

Governed under Section 125 of the Internal Revenue Code, Cafeteria Plans help you and your employees save money by using tax-free dollars to pay for group health insurance premiums, out-of-pocket medical expenses, the cost of dependent care and more. Section 125 "Cafeteria Plans" have earned their nickname because they allow employees to choose benefits a la carte from a menu of benefit offerings. 

How Cafeteria Plans Work 

Employers establish a menu of benefits by electing to offer group health or accident insurance, group term life insurance, disability benefits, dental insurance, vision insurance, or voluntary benefits. A Cafeteria Plan may also include a Premium Only Plan (POP), a Flexible Spending Account, Transportation and Parking reimbursement, and Dependent Care Assistance Plan as benefit options. Employees have the freedom to choose the options that best benefit them. 

Tax Advantages 

Employers save on payroll taxes (FICA, FUTA and SUI) and worker's compensation premiums. 

Employees save on Federal, State and FICA taxes. The average employee saves 25-30% by funding benefits on a pre-tax basis through the Plan. When you consider the average family pays $800 - $2,500 per year on medical expenses, that's a significant savings! 

Related to: TPA in South Portland, ME

Resources

Internal Revenue Service (IRS)

  • Federal tax laws, rules and forms
  • Businesses and individuals
  • Independent contractor rules for IRS

U.S. Department of Labor (DOL)

  • Federal wage and hour law
  • Exempt and non-exempt employee status
  • Compliance assistance
  • Independent contractor rules for DOL

Employee Benefits Security Administration

Benefit plan compliance and assistance (health and retirement) COBRA HIPPA

Affordable Care Act Information and Health Insurance Marketplace

U.S. Bureau of Labor Statistics (BLS)

Labor statistics & wage data

Reviews

We look forward to working with TPS Group next year

We look forward to working with TPS Group next year

As another year ends, I want to express my sincere gratitude and appreciation to you and TPS Group for assigning us Krista Blier. Krista provides exceptional customer service and has been a major asset to me and Lynch, Traub, Keefe & Errante, P.C. She is extremely knowledgeable and always accessible. Always on top of the RMD’s, giving me an explanation on form 5500-SF to present to Mr. Keefe & keeping us updated with any account changes as well as specifics. It is a relief knowing I have full faith in Krista and can turn a blind eye to our account. I cannot tell you how many vendors/brokers I have to stay on top of and babysit to make sure our deadlines are met and to perform their job duties. Krista is a pleasure to work with and we look forward to working with her and TPS Group next year.

- Michael Panela

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