Section 125 Cafeteria Plan

Known as a Section 125 Plan, Flex plan, or Cafeteria plan, this kind of plan can be relatively inexpensive to run and is a great perk for employees. There are two separate parts to a 125 Plan.  A company may offer one or both parts together in a 125 Plan.

1. Premium-Only Plan (POP)

Also known as a pre-tax contribution plan, this plan allows employers to let employees pay their contributions to their health insurance on a pre-tax basis.  We will provide the following so that an employer can administer the plan itself:

• All documents necessary (Plan Document, Employee Notices, Waiver Forms and Change of Status Forms
• Discrimination testing once each year to confirm that your plan is in compliance

2. Flexible Spending Accounts

There are two types of Flexible Spending Accounts (FSAs).

Health Care Spending Account: Employees may elect to set aside pre-tax dollars to pay for health care expenses; and/or
Dependent Care Spending Account: Employees may elect to set aside pre-tax dollars to reimburse themselves for dependent care expenses within IRS limits.

KBI will:

• Explain in detail how an FSA works.
• Answer case-specific questions.
• Find an experienced Administrator to administer and communicate the FSA program. Although KBI does not administer FSA plans, we can recommend and price several competent administrators, recommending one who will support your specific needs and budget.

Full Cafeteria Plans

We can also help large employers who wish to run all their benefits (within legal restraints) through a cafeteria plan.  We have a great deal of experience setting up “flex credits” or “benefit dollars” employees can use to select the benefits they need, based on a set dollar or credit provided by the employer.