The Benefits of a 125 Cafeteria Plan

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Would you like to customize your benefits and save money doing so? A 125 Cafeteria Plan (also called a Section 125 Plan) is a cost-effective way to offer employee benefits, with tax advantages for both employers and employees.

This plan enables employers to:

  • Enhance benefit programs.
  • Reduce the employer’s share of FICA and FUTA taxes.
  • Increase employer savings as participation rates increase.
  • Give employees funds to cover out-of-pocket medical, dental and vision expenses, dependent care, and health insurance premiums.

Sponsor up to four pre-tax options for employees

  • Flexible Spending Account (FSA)
  • Limited Purpose FSA for dental and vision expenses
  • Dependent Care Assistance Plan
  • Premium Only Plan

Other qualified pretax benefits—and who qualifies

Employees, their spouses, and dependents may access a 125 Plan for:

  • HSAs
  • Group health
  • Accident and disability coverage
  • Adoption assistance
  • Group term life insurance

Contact CHR to get started

Contact us to discuss how a 125 Cafeteria Plan may benefit your company and your team, and for assistance implementing one in your workplace.