The 4th of July celebration may be over, but employers and employees across the country are enjoying their FREEDOM with the BASE® 125 Cafeteria Plan has to offer. Employers can choose which pre-tax benefit options to provide and the employees can customize to what works for them. Each plan helps to expand the business’ benefits package and both the employer and employees find more ways to maximize their savings and tax benefits. When employees elect pre-tax contributions, it also helps to reduce the employer’s share of FICA/FUTA taxes; employees will see an increase in take-home pay.
A Flexible Spending Account (FSA) is a plan established by the employer that allows employees to set aside money, on a pre-tax basis, to pay for qualifying out-of-pocket medical expenses. FSA elections can only happen once a year unless a qualifying event takes place; such as marriage, divorce, or the birth of a child. The maximum contribution limit on this benefit is $2,700.
This plan gives the employee the FREEDOM all year to pay for qualifying expenses such as:
- Flu shots
- Hearing aids & batteries
- Physical therapy
- Rx prescriptions
- And MUCH MORE
A Dependent Care Assistance Program (DCAP) is a plan established by the employer that allows employees to set aside money, on a pre-tax basis, to pay for qualifying dependent care expenses. No matter the type of care, this plan provides some additional financial assistance to help take care of the family. The maximum contribution limit on this benefit is $5,000.
This plan gives the employee the FREEDOM all year to pay for daycare, before/after school programs, and elder care for the following types of individuals:
- Children under 13 claimed on participant’s tax return as a dependent
- A spouse who is incapable of self-care
- A dependent, over 13, sibling, or in-law, incapable of self-care that lives with the participant and is claimed on the tax return
- Care for a disabled spouse or dependent outside of home, but lives with participant at least 8 hours a day
A Limited Purpose Flexible Spending Account (Limited Purpose FSA) is a plan established by the employer that allows employees to set aside money, on a pre-tax basis, to pay for qualifying dental and vision care expenses. This type of plan is available to those enrolled in a High Deductible Health Plan (HDHP) and a Health Savings Account (HSA). When enrolled in a Limited Purpose FSA, employees are open to utilizing HSA funds for savings and investment opportunities.
This plan gives the employee the FREEDOM all year to pay for qualified out-of-pocket dental or vision care expenses. Such as:
- Dental – cleanings, fillings, crowns, or braces
- Vision – contact lenses, eyeglasses, eye exams, and vision correction procedures
A Premium Only Plan (POP) is an optional solution for employers who want to provide employees with an affordable way to pay for their group health plans. This plan allows for employees to pay for a variety of employer-sponsored benefits, such as supplemental insurance premiums on a pre-tax basis. Any size of employer can take advantage of a POP. It is a simple IRS-approved change in an employer’s payroll process that deducts the employee portion of employer-sponsored benefit premiums pre-tax.
Let FREEDOM ring…the FREEDOM to pay for eligible expenses all year with the BASE® 125 Cafeteria Plans. Provide the FREEDOM to pay for eligible out-of-pocket medical, daycare, and insurance premiums with pre-tax dollars while saving valuable tax dollars each year! For more information on the BASE® 125 Cafeteria Plans, call 888-386-9680.