Individual employers can provide outstanding employee benefit programs and expand benefit availability and affordability.

By utilizing an IRC Section 125 Cafeteria Plan an employee can provide their employees the vehicle to affording employee benefits and realizing a substantial tax savings by "pre-taxing" deductions for these benefits.

The employer benefits as the corporate tax burden is also significantly reduced.

How Do Cafeteria Plans Work?

A Cafeteria Plan is an employee benefit plan specifically authorized in Section 125 of the Internal Revenue Code.

Each employee selects benefits from the Cafeteria Plan menu and then pays for these benefits by electing salary "redirection" in the amount necessary. Most importantly, the redirected salary is not subject to Federal Income or Social Security (FICA) taxes! A significant savings for both the employee and the employer.

Allowable benefits include dependent care assistance (day care), uninsured medical expenses, employee paid medical, dental, vision, cancer and group life and disability premiums.

Employers are not required to pay Social Security (FICA) employment taxes on the gross amount of redirected salary.

Cafeteria Plans are traditionally designed and administered by a Third Party Administrator (TPA) for nominal fees. Our reputation has been developed by being a leading TPA in administration services!

P.O. Box 543 Simpsonville, KY 40067-0543 Phone: (800) 777-1596 (502) 722-9746 Fax: (502) 722-9741