Cafeteria Plans and Flexible Spending Accounts

Save employees money while providing them with a convenient way to pay for certain expenses with before-tax dollars. Employees save FICA, federal and state taxes while the employer saves FICA and workers compensation taxes.

Under Section 125 of the IRS code, an employee is allowed to pay for his/her group health premiums, other qualified insurance premiums, unreimbursed medical costs, child and dependent care costs and more...all with tax-free dollars.

We make it safe, secure and easy-to-access for your employees.

• Cafeteria Plan Advantages to the Employer Include:

• Save Payroll Taxes - You'll reduce your Social Security (FICA), workers compensation taxes, federal unemployment taxes (FUTA), and generally state unemployment taxes. This usually accounts for a savings of 8% or more on every dollar your employees run through the plan.
• Eliminate Hassles - You'll have more time to get to your other duties. You'll have the piece of mind in knowing that your company is compliant with IRS regulations. You'll receive a signature ready Form 5500. Reports generated with every claims processing period. Online enrollment will help eliminate the hassle of handling paper forms.
• Save Time - All customer service and claims adjudication is handled by our qualified staff. Online enrollment will absolutely free up more of your time.
• Improve Employee Morale - You'll increase the take-home pay of your employees.
• Improve Your Total Benefits Package - You'll offer your employees and new recruits a better total benefit package.
• Reduce Your Turnover, Hiring, Interviewing, & Training Costs
• Soften the Blow of Escalating Health Insurance Costs - A cafeteria plan will allow your employees to include eligible expenses for reimbursement - Medical/Dental Reimbursement and Dependent Care Reimbursement Accounts

• Employer tax savings example for a company with 50 cafeteria plan participants.

	Without a Cafeteria Plan	With a Cafeteria Plan
Annual Payroll	$1,500,000	$1,500,000
Employee Paid Premiums	- 0	- 120,000
Unreimbursed Medical Expenses	- 0	- 11,700
Dependent Care Expenses	- 0	- 25,500
Taxable Payroll	$1,500,000	$1,342,800
Taxes (FICA)	- 114,750	- 102,724
Savings	$ 0	$12,026 per year

• Employee Paid Premiums: Numbers based on insurance premiums averaging $200 per month per employee for 50 employees (50 employees x $200 per month = 10,000 per month x 12 months = $120,000).
• Unreimbursed Medical Expenses: Numbers based on 15 employees who contribute an average of $65 per month (15 employees x $65 per month = $1,040 per month x 12 months = 12,480).
• Dependent Care Expenses: Numbers based on 5 employees who contribute an average of $425 per month (5 employees x $425 per month = $2,125 per month x 12 months = 25,500).
• Please note: Your company's actual savings may vary depending upon your specific tax situation. Social Security benefits will be affected.

• Partner with myCafeteriaPlan.com and receive hassle-free cafeteria plan administration that includes the following benefits:

• Personalized Plan Design Services - you'll receive a cafeteria plan tailored to meet your individual company's needs
• Signature Ready Forms - you'll receive a Corporate Resolution, Plan Document, Summary Plan Description, and all other necessary forms including Enrollment Forms and Claim Forms
• 24-hour Online Access - employees can view their individual account information at any time, 24-hours a day/seven days a week
• 24-hour Interactive Voice Response System (IVRS) - employees without Internet access can still receive the same personalized service and hear their individual account information Toll-Free via any touch button phone 24-hours a day/seven days a week
• Fast Payment of Claims - claims are promptly and professionally adjudicated to provide your employees quick turnaround time on all claims submitted
• Direct Deposit - employees can receive reimbursements deposited directly into their checking account
• Complete Account Summary - with every claim payment a summary of account activity will be provided
• Communication - presentations, employee handouts, worksheets, e-mail newsletter, wake-up letters, and payroll stuffers are designed to help your employees understand their cafeteria plan and receive the maximum advantages of using their plan
• Compliance Assistance - you'll receive all the necessary testing and a signature ready Form 5500

• Look at the following employee tax savings example!

	Income Before Joining The Plan	Income After Joining The Plan
Gross Salary	$3,000	$3,000
Before-tax Medical Costs	- 0	- 200
Taxable Salary	3,000	2,800
Taxes (Federal, State, FICA)	-750	-700
After-tax Medical Costs	-200	-0
Total Take-home Pay	$2,050	$2,100
Savings ($2,100 - $2,050)	$0	$50 Per Month

• Based on $200 per month medical deduction and $3,000 gross salary.
• Jane earns income of $3,000 a month and has a group medical deduction of $200 a month. Before joining the cafeteria plan her group medical costs were deducted after-taxes.
• After she chooses to join the cafeteria plan, her medical costs are deducted before-taxes which results in her savings:
  • Her taxable salary being reduced
  • Her taxes being decreased
  • More take home pay

What will your employees do with an extra $50* a month/$600 a year they'll receive by participating in your company's cafeteria plan? A cafeteria plan is an excellent way to increase employee morale and satisfaction reducing your turnover. This results in a savings in interviewing, hiring, and training dollars.

Don't delay, your company is losing money by not offering a section 125 cafeteria plan to your employees. If you're currently offering such a plan, how is your current 125 plan service?

Here's a sample of what you receive in partnering with BusinessPlans for you Section 125 Cafeteria Plans administration:

• 24 Hour Online Individualized Account Access
• Fast Payment of Claims
• Toll Free Interactive Voice Response System
• Personalized Service
• Downloadable Forms Online
• And More!

Contact us to establish a Cafeteria Plan and take advantage of this powerful pre-tax benefit. You and your employees save! You have nothing to lose!