Section 125 Plans


Administration for Section 125, FSA, HSA, HRA & Transit Plans.
Section 125 Cafeteria Plan administration is available for those clients who prefer to outsource Section 125 FSA, HSA and or HRA administration. We provide a state-of-the-art web portal for 24/7 access to account information and funds. CLICK HERE TO ORDER

The Section 125 Plan provides tax savings by reducing employee medical premiums from your gross salary prior to calculation of federal income and social security taxes, as allowed under Internal Revenue Code Section 125.
Newly eligible employees may elect to waive Section 125 at the time they choose a medical plan. Otherwise it can only be changed during the open enrollment, for a January 1 effective date.

The Section 125 Plan reduction does not reduce the salary on which your maximum deferral limit for the Voluntary Investment Program is calculated. The reduction lowers the salary on which both Social Security and Unemployment Benefits are calculated.

Section 125 Plans include Flexible Spending Accounts and Dependent Care Accounts.  With the addition of HSA Section 125 plans and Section 105 HRA plans, employers have more options to reduce health insurance premiums and taxes through the use of high deductible health plans (HDHP). Some of the premium savings can be used to cushion the effect of these new high deductibles to employees through either employee funded (HSA) or employer funded (HRA) spending accounts.