Section 125 - Cafeteria Plans

At Shorepoint Insurance Services, we have Benefit Experts who can review and implement the plan that is right for you and your employees. We can offer the following:

• Section 125 – Premium only plan
• Medical Flexible Spending Accounts
• Dependent Care Flexible Spending
• Full Flex Plans (defined contribution)

Section 125 of the Internal Revenue Code, also referred to as a “Cafeteria Plan,” offer significant benefits to employer AND employees alike. These benefits include significant tax savings as well as maximizing the overall value of employer and employee benefit dollars.

By offering these benefits, the employers save money, as they do not pay FICA or FUTA tax on the amounts contributed through the cafeteria plan. Additionally, the amounts the employees are paying toward their premiums are not considered wages for the purpose of determining worker’s compensation premiums.

The employees directly save money because they can pay for their share of their medical benefits with pre-tax dollars. These premiums are exempt from federal income tax, Federal Insurance Contribution Act (FICA), and the Federal Unemployment Tax Act (FUTA) taxes.