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In today's competitive marketplace, many employees are making employment decisions based on company sponsored benefits. Just like 401(k) plans, once an employee has been exposed to the savings generated by a Cafeteria Plan they are less willing to accept positions with employers who do not offer them. This benefit not only attracts talented, qualified professionals to your company, but can also make your current employees much happier with their benefits package.

With the ever-rising cost of providing medical coverage for employees, companies are finding it necessary to defer more and more of the financial burden to their employees. A Cafeteria Plan creates a significant tax savings that can take the sting out of this additional burden. Not to mention that the payroll savings to the employer typically outweighs the cost of administration.

A Cafeteria Plan allows the employer to contain the expenses of providing costly employee benefits while offering employees the opportunity to choose an individualized benefit package. A Cafeteria Plan may be set up to provide any combination of the following programs:
  • Premium Conversion Plan - Employees pay premiums for employer-provided health plans on a pre-tax basis
  • Flexible Spending Accounts - Employees are reimbursed on a pre-tax basis for health care expenses and/or child care expenses
  • Short and Long Term Disability
  • Life Insurance
  • Other Insurance Coverage
These benefits are nontaxable to the employee if the Cafeteria Plan meets the requirements of Internal Revenue Code Section 125.

Our services include the following:
  • Preparation of plan documents for the employer, Summary Plan Description for distribution to employees, and all administrative forms
  • Ongoing administration, including participant accounting, collection of reimbursement requests, reimbursement check printing, and preparation of participant statements and company reports
  • HIPPA Compliance
  • Nondiscrimination testing
  • Preparation of annual Form 5500, required Schedules and Summary Annual Report
  • Consulting on plan design, interpretation and operational issues
Integral to the success of a Cafeteria Plan is an understanding by the employees of the tax benefits of the different programs. Here again our experience in conducting or facilitating employee meetings works to promote confidence and participation in the plan.

If you currently have a plan in place and have questions about compliance issues, or feel that your employees don't take advantage of this benefit, then call us today to discuss your situation and your options.

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