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FSAs
(Flexible Spending Accounts)
Flexible
Spending Accounts are tax-favored accounts that allow
participants to set aside money pretax for eligible Medical
and Dependent Care costs.
CPActuaries will administer
your Flex Plan and Cobra for a rate that is less than your
payroll tax savings. The Flex Plan will give each employee
who elects to participate with a debit card loaded with
their annual election.
As the deduction comes out of
their check, they save Federal, FICA and Medicare taxation
(state taxes if applicable). The company saves the matching
FICA, Medicare, FUTA and Workers Comp costs, which are
approximately 12% of payroll.
Premium Only Plan (POP)
This plan allows employees to make their contributions to
group insurance plans pre-tax dollars.
Employees’ premium contributions are automatically deducted
from their salaries before taxes are taken out.
Taxable income is reduced by the amount contributed, so
employees pay less in taxes and have more take-home pay.
Section 125 (Cafeteria Plan)
Administration
These plans allow employees to select a variety of employee
benefits and pay the cost of these benefits on tax free
basis through payroll deductions.
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Three
Types of Qualified Plans under Sec. 125
1.
Flexible Spending Accounts (FSAs)
2. Premium
Conversion Plans (which allow employees to make their
contribution to the premium of the health plans with pretax
dollars)
3.
Cafeteria Plans
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Questions Regarding FSAs?
FSA FAQs
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