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 I.R.C. Section 125 FSA/POP Plans - make health care coverage more affordable for millions of employees, while employers save FICA and other payroll taxes on contributions from participating employees which are contributed to the plan. The employer savings can be as much as 10%. The incentive for employee's to pay any required contribution towards their or their dependents insurance coverage using this type of plan is simple. Section 125 of the Internal Revenue Code allows employees to pay certain eligible insurance premiums with pre-tax dollars. As a result, employees can save an average of 30% in state and federal taxes on their contributions! That means more in employees hard earned paycheck.
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Section 125 also allows employees to participate in a Flexible Spending Account (FSA). There are two types of spending accounts a 'Health Care Spending' account where eligible unreimbursed expenses can be paid with pretax dollars and a 'Dependent Care' spending account. Employers can elect to offer 'Dependent Care' or not at their discretion. Therefore employees can plan ahead for likely medical expenses by establishing a 'Health Care Spending Account' using pretax dollars. Some examples of eligible expenses are:
- Un-reimbursed Deductibles
- UN-reimbursed Coinsurance
- Prescription and office visit co-pays
- Certain Over the Counter Medications
- Dental and Orthodontia
- Hearing Aids (& batteries) and phone equipment for the hearing impaired
- Radial Keratotomy
- Laser surgery for vision correction
- Chiropractor and Acupuncture
- Durable medical equipment
- Infertility and psychiatric services
- Eyeglasses and contact lenses and contact solution
- Many over the counter drugs are also now eligible
Kelley Insurance & Financial has relationships with the Nations top full-service 'FSA/POP Administrators' that will keep your plans running smoothly and in compliance with the law. We have only selected companies that have earned our business by demonstrating outstanding service.
As a 'Full Service' Section 125 FSA or POP provider, administration services include:
- Disclosure
- Plan Documents
- Summary Plan Description (SPD)
- Reporting
- Annual discrimination and compliance tests
- File IRS Form 5500 annually
Click here, or on the toolbar in order to get a Section 125 FSA/POP plan quote and use 'smart dollars' to fund employee benefit programs on a pretax basis.
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