Amid the ever-changing compliance and regulatory landscape, our team of professionals work with employers of all sizes and across many different industries to design, implement, and maintain a health & welfare package that is right for your employees.
Section 125 cafeteria plans are simple plans under IRS code section 125 that allows employees to pay for certain expenses with pre-tax dollars. Code Section 125 provides a menu of different benefits to keep your hard-earned money in your pocket. Employers select which benefits they would like to offer to their employees. Employees can then choose to participate in some or all of the available benefits offered by the company. Cafeteria plans are beneficial to both the employer and the employees' by providing tax savings on the amounts withheld from employees pay. Alliance Benefit Group Rocky Mountain administers the following tax saving benefits:
FSA Flexible Spending Account
An FSA is a benefit employers offer their employees to save money on out-of-pocket medical, dental, vision and pharmacy expenses. Employees elect an amount that they can utilize during a plan year. The funds are taken out equally each pay period over the course of the plan year before taxes are calculated. This can save employees 30% or more in taxes on the amount they have withheld. These funds are available to use any time during the plan year to pay for expenses incurred during the same plan year.
DCAP Dependent Care Assistance Program
A DCAP is another way that employees can save money on taxes. If you and your spouse both work and pay a company or individual to care for your dependent children under age 13 to be gainfully employed, then you can deduct those expenses pretax up to $2500 for a single tax filer and $5000 for a married filing jointly. Employees can request reimbursement of these funds as often as needed and will be reimbursed up to the amount available in the account. Funds deducted to pay for dependent care expenses can save employees 30% or more on taxes on the amount deducted.
HRA Health Reimbursement Arrangement
An HRA is an employer sponsored plan set up to help offset employees' out of pocket medical expenses. HRA’s are 100% employer funded. HRA plans give employers great flexibility in plan design and covered expenses. Plans can be designed to pay for all eligible healthcare expenses or structured to pay for only deductible expenses. HRA plans can also be set up to roll funds forward. Some HRA plans allow a “spend down” option for terminated or retired employees. Each plan is uniquely designed so please contact your company to see how your HRA plan operates.
HSA Health Savings Account
An HSA is a personal account set up to pay for out of pocket medical, dental, vision and pharmacy expenses. Unlike other plans, these are portable and belong solely to the participant. Employees and employer can put money into these accounts up to an IRS annual cap each tax year. These funds roll over from year to year. Funds contributed by the employee can be withheld from a pay check pretax if an employer has a Cafeteria section 125 plan. Individuals wanting to have an HSA must have a qualified high deductible health care plan (HDHP) and cannot be covered by any other insurance that covers their health care expenses.
Parking and Transit Plans
Parking and Transit plans are fringe benefits made available by an employer to reimburse employees for expenses incurred for travel and parking associated with work. Transit reimbursements are for public transportations such as buses, trains, subways, light rails or ferries. Parking reimbursements are available for employees that pay to park at their primary place of business.
POP Premium only Plan
A POP plan is an employer sponsored plan that allows employees to withhold insurance premiums from their paychecks on a pretax basis to pay for group insurance. An employer can add group insurances like medical, dental, vision, cancer, disability, accident and life insurance up to $50,000.
Our Full Range of Cafeteria Services:
- Plan Design
- Plan Documents including SPD
- Enrollment education and forms
- Online enrollment available
- Debit cards
- Customer Service call center
- Secure online account access for employees and employers
- Daily claim processing
- Participant reimbursements within 2 business days
- Direct Deposit
- Comprehensive Nondiscrimination testing
- Tax form 5500 filing (if necessary)
- Experienced Account Managers