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Health Benefits and Tax
Benefits & Compensation
Health Benefits and Tax
Exchange ideas about health plans, retirement, work/life benefits, and employee assistance.
Hello,
We require the employees to cover 25% of the premium of the group health plan. Are these 25% employee contributions allowed to be pretax items on their paycheck?
Thanks,
JS
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Forums » Topic Forums » Benefits & Compensation » Health Benefits and Tax
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Health Benefits and Tax
posted at 9/13/2010 2:55 AM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
And for the employer to be in compliance with 125, they must have a plan document and must follow specific reporting/testing procedures. It's not hard, but it is important to do so. You can't just decide you want the benefits pretax, declare it a section 125 plan and do nothing else.
If I remember correctly, some carriers will provide a prototype document free. Others charge a small amount and still more third parties offer the same. If the 125 plan is just for pretax deductions, it is much easier than if you want other deductions (FSA, DCA, etc.) |
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Health Benefits and Tax
posted at 9/14/2010 5:12 AM EDT
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Posts: 1047
First: 4/11/2002 Last: 9/14/2011 |
A Section 125 plan can be rolled out for between $250 and $1000 usually. As rupert points out, it's possible that some carriers will provide it at no charge (I think UHC was doing this for smaller companies). Annual discrimination testing should only be a few hundred dollars.
If you want to also set up an FSA, there will be additional charges in the form of monthly administrative fees since there's more work to be done. |
Forums » Topic Forums » Benefits & Compensation » Health Benefits and Tax
