THE
FLEXIBLE BENEFITS PLAN
A TAX SAVINGS ALTERNATIVE
Implementing a Flexible Benefits
Plan is a "win-win" decision for a business and its employees. Employees win
because it allows them to pay their portion of their Group
Insurance Premiums with TAX FREE dollars. The business wins because employees
participation in a Flexible Benefits Plan generates a positive cash flow for the business
while reducing its Social Security contributions.
In addition to the
group insurance programs you may offer, employees may also be eligible to pay for certain
INDIVIDUAL health related insurance premiums with tax free dollars.
A Flexible Benefits Plan gives employees the opportunity to
take advantage of a Medical Care
Spending Account and a Dependent Care Spending Account.
By using these spending accounts and with careful planning, employees can now get the most
from their benefits program by using PRE-TAX instead of AFTER-TAX dollars for eligible
expenses. With this program, employees can control how they want to budget their
benefit dollars to best meet their financial needs.
In addition to allowing your employees benefits flexibility
and real dollar savings, you as the employer will save FICA tax on salary your employees
choose to redirect through the Plan. In other words, the employer does not pay the 7.65%
matching FICA tax on the salary that employees redirect towards tax free benefits.
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