|
|
|
Currencies, Taxes and Citizenship
Currencies, Taxes and Citizenship By William Cate July 2004 [http://home.earthlink.net/~beowulfinvestments/] [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/] Would you accept 1,185,000,000 Tugriks for your...
Do You Pay Taxes On eBay Income?
Small Business Q&A with Tim Knox Q: I read your last column about paying income tax on eBay sales if you are doing it as a business, but as someone who only sells on eBay occasionally I'm still confused if the IRS rules apply to me. Can you tell me...
Entrepreneurs Ask: What Can a Virtual Assistant Do For Me?
Great question! Freeing your time is an indisputably key element in growing your business! When you delegate tasks to the capable hands of a professional Virtual Assistant (VA), you can quickly and easily refocus your energies on other aspects of...
Save Money on Taxes - Double Your Income Now With Tax Saving Tips on Deductions
Adding Your First Additional Stream of Income Most new wealth builders currently have a full-time job. After realizing that means “Just ----Over Broke” they commit to quitting their job and starting their own business. The concept is good, but...
Small Business Valuation Primer
For simplicity's sake, this article will assume that the buyer will be acquiring a single business with possibly more than one location (for example a small Laundromat business with two locations). In addition, we will not be covering valuation...
|
|
| |
|
|
|
|
|
|
How to Set Up a Pre-tax Insurance Cafeteria Plan Benefit
Setting up and implementing a pre-tax insurance Section 125 Cafeteria Plan is fairly easy. Essentially, an employer needs to establish what type of plan that will provide the solution to their unique plan needs, set up the plan with proper documentation, notify & educate employees, and perform non-discrimination testing.
A Section 125 Cafeteria Plan is a very broad benefit. In simplest terms one may break down such a plan into three basic levels which include a Premium Only Plan (POP), Flexible Spending Accounts (FSA), and a full-blown Cafeteria Plan that uses "credits or benefit bucks" also referred to as a Consumer Driven Health Care (CDHC) or Defined Contribution (DC) Plan.
A Premium Only Plan (POP) allows for employees to pay their portion of the group insurance premium on a pre-tax basis and is a good start to saving taxes for you and your employees.
Taking your 125 plan to the next level includes implementing the Flexible Spending Accounts (FSA). Generally, there are two FSA accounts including a Medical FSA (medical / dental / vision) and a Dependent Daycare FSA. These FSA accounts will allow for the unreimbursed out-of-pocket expenses to be paid on a pre-tax basis. Examples include dependent daycare, office co-pays, prescription co-pays, eye exams, eyeglasses, contacts, orthodontics, etc…
A full-blown Cafeteria Plan / Consumer Driven Health Care (CDHC) plan that utilized "credits or benefit bucks" simply allows the employer to provide employees with a limited number of employer sponsored credits, which the employee then decides where they'd like to apply these credits within the menu of benefit options within the company's benefit program. Employees may then supplement with their own dollars to buy additional benefits or increase levels of
Associated Websites
coverage.
Partnering with a qualified Section 125 Cafeteria plan administrator will provide an up-to-date plan document and set up. Although note that not all documents and outsourced administration are equal. I hate to use a cliche, but "you get what you pay for".
For example, BPI - myCafeteriaPlan is a third party administrator that provides employers with documentation and ongoing outsourcing. Services you'd receive include:
Up-to-date Plan Document
Summary Plan Description (SPD) master copy
Corporate Resolution
Customized Forms (enrollment, change of status, termination)
Legal Review
Attorney Opinion Letter
Discrimination Testing
Signature-ready Form 5500, if needed
Powerful and easy-to-understand employee education
myCafeteriaPlan's documentation and plan set up incurs a one-time fee, as they do not charge a yearly renewal fee. Once an employer signs with myCafeteriaPlan, they will simply pay the ongoing cost of administration. Some administrators charge a flat fee while myCafeteriaPlan's ongoing administration is determined by the total number of participants, NOT accounts. As the number of participants increase, the cost per participant will decrease.
Visit www.myCafeteriaPlan.com or call 800.865.6543 to discuss setting up your pre-tax 125 cafeteria plan today, whether you need documentation only or documentation and ongoing administration.
About the Author
David Turner is Vice President at BusinessPlans, Inc. (BPI) - myCafeteriaPlan, which has been a third party administrator for over 14 years for pre-tax section 125 cafeteria FSA plans, section 105 healthcare reimbursement arrangements (HRA), and section 132 qualified transportation (Transit) plans. Visit www.myCafeteriaPlan.com or call 800.865.6543 for more information.
|
|
|
|
|
|