Forums
Forums » Topic Forums » Benefits & Compensation » Section 125 Pre/Post-Tax
|
Section 125 Pre/Post-Tax
posted at 6/19/2012 5:18 PM EDT
on Workforce Management
|
Posts: 2
First: 6/19/2012 Last: 6/22/2012 |
Can a section 125 plan force employees to take eligible deductions (health care) as pre-tax deductions or must the employer always provide employees with a post-tax choice as well? |
|
Re: Section 125 Pre/Post-Tax
posted at 6/20/2012 11:14 AM EDT
on Workforce Management
|
Posts: 180
First: 9/21/2011 Last: 5/14/2013 |
In Response to Section 125 Pre/Post-Tax: Can a section 125 plan force employees to take eligible deductions (health care) as pre-tax deductions or must the employer always provide employees with a post-tax choice as well? Posted by jb1929 I can only see one reason why an employee would want it post tax...that is too be able to cancel mid year without a qualifying reason. You need to check to see if you contract allows for that.... if not, that may answer the question in a round about way. That said, I don't think it is a MUST but I have had. One employee over the years request this.... Because he was considering buying individual instance for his family and couldn't get it done by the start of the year. In the end, he stayed on the company's insurance all year. Also you ned to look in your sect 125 plan document. And forms.... Is there a waiver of benefits form? |
|
|
Re: Section 125 Pre/Post-Tax
posted at 6/21/2012 5:31 PM EDT
on Workforce Management
|
|
Posts: 6
First: 10/7/2011 Last: 2/12/2013 |
Some employees wish to keep their social security wages from being reduced. Not sure this makes financial snse, but it's the reason I've been given. Don't know about the requirement to offer the post-tax option. |
|
|
Re: Section 125 Pre/Post-Tax
posted at 6/22/2012 8:14 AM EDT
on Workforce Management
|
|
Posts: 2
First: 6/19/2012 Last: 6/22/2012 |
We have traditionally offered our employees the option to select after tax for their health elections. Very few employees choose after tax. We would like to simplify by no longer offering the after tax option. We believe we can do so as long as our plan description supports it. Is it unusual to provide no after tax option? |
|
|
Re: Section 125 Pre/Post-Tax
posted at 6/25/2012 11:57 AM EDT
on Workforce Management
|
|
Posts: 180
First: 9/21/2011 Last: 5/14/2013 |
THis is a really old answer (1997) and I know that the Section 125 regulations have changed since then (proposed 2007 and finalized later on) , but here is one I found: http://benefitslink.com/modperl/qa.cgi?db=qa_125&n=16 |
|
|
Re: Section 125 Pre/Post-Tax
posted at 6/27/2012 9:51 AM EDT
on Workforce Management
|
|
Posts: 14
First: 10/24/2011 Last: 5/3/2013 |
I would make the pre-tax election default unless an employee specifically comes to you and requests to have it done post-tax. Don't muddy the waters on this and give your employees another decision to have to think about when it's really a no-brainer. On a side note, your insurance carrier may either not allow after-tax deductions or won't accept a termination mid-year. The contracts are written with the assumption that employees aren't hopping on and off whenever it suits them. |
|
|
Re: Section 125 Pre/Post-Tax
posted at 7/4/2012 4:28 PM EDT
on Workforce Management
|
|
Posts: 1
First: 7/4/2012 Last: 7/4/2012 |
In Response to Section 125 Pre/Post-Tax: Can a section 125 plan force employees to take eligible deductions (health care) as pre-tax deductions or must the employer always provide employees with a post-tax choice as well? Posted by jb1929 Yes, it is permitted by the 2007 proposed regs to limit the choice of benefits to pre-tax election only. The "choice" requirement is satisfied by not electing the benefit vs. electing on a pre-tax basis. Whether or not the Plan Document of a particular employer reflects that requirement is another matter. |
Forums » Topic Forums » Benefits & Compensation » Section 125 Pre/Post-Tax
