Offer the Benefits your Employees Want with a Section 125 Cafeteria Plan
Are you having problems with your cafeteria plan and IRS compliance? Do Discrimination Testing and 5500 forms keep you up at night? Remove the stress and hassle by allowing our expert management team to handle your accounts:
- We provide compliance guidance, consulting and assistance.
- You’ll be kept up-to-date with all changes, edits and additions in one convenient place.
- We manage all of this for you so you can sleep easier.
Save Money, Gain Control
A 125-cafeteria plan creates sizeable savings for you and your employees by eliminating taxes on eligible benefits. Get control of benefits, save money and attract skilled employees with Section 125 cafeteria plans.
We provide you the opportunity to offer the customized employee benefits you want combined with the ease of having a single point of contact:
- Save time and money by consolidating multiple vendors into one — us!
- Simplify by managing all your needs in one place.
- End employee frustration. Our Customer Care team listens to your employees and we quickly address their concerns.
- Reduce paperwork and spend time on profit-making activities.
- Connect at your convenience with a variety of contact options.
- Increase employee satisfaction by delivering plans that fit their care needs and budgets.
Save with Cafeteria Plans
You choose the benefits that fit the needs of your company and employees. Deductions are spread across employees’ paychecks so there is no large upfront cost to them. Increase the effectiveness of your café plan’s savings by offering medical expenses and dependent care Flexible Spending Accounts!
Turn Enrollments into Savings Opportunities
Highlight a specific health plan you prefer your employees enroll in with cafeteria plans as an incentive. These plans save your employees money and give them the opportunity to purchase additional benefits and increase your pre-tax savings. The more employees enrolled, the fewer dollars you’re paying in Social Security and Medicare taxes.
Example:
Without an FSA:
Employee Gross Monthly Income = $2,000
You pay taxes on the full $2,000.
With an FSA:
Employee Gross Monthly Income = $2,000
Employee Pays $100 into the FSA, so adjusted Gross Income = $1,900
You pay taxes on only $1,900.
Maximize Savings by Keeping These Points in Mind:
Cafeteria plans can be a win-win for employers and employees alike, but there are a few things you must anticipate.
- Social Security: Any funds in your FSA are tax-free but they may result in lower Social Security income at retirement. However, the savings created by using an FSA are usually greater than the relatively minor dip you may experience at retirement, especially if they are safely invested.
- Use it or lose it: Any funds in an account at the end of the year cannot be rolled over to the following year. This is easily avoided by carefully estimating the funds for your account(s) when enrolling.
- Dependent Care: Dependent care account expenses cannot be recovered through the childcare tax credit. But the savings from using the account is generally more than you recover through other means. Encourage your employees to discuss how to best optimize this with a tax expert before enrolling.
- Employers must maintain strict paperwork, including a written plan document, filing proper tax returns and maintaining an up-to-date Form 5500. Employers may not discriminate between regular and “highly compensated” employees when offering a cafeteria plan and must routinely test for such discrimination.
When you choose FBMC, you can trust that we will efficiently manage all of this for you.
Is your current cafeteria plan eating too much of your hard-earned profit? Turn the tables with FBMC. Call 1-866-690-4208 or e-contact us today using our Sales Contact Form.
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