An exceptional way to enhance your fringe benefit package is through a provision of the Internal Revenue Code, Section 125. This Federal tax-qualified program allows qualified insurance benefits to be purchased with before-tax dollars, resulting in tax savings for employers and employees alike.

Under a Section 125 Plan, pre-tax dollars are used to purchase benefits. These dollars may come from two sources:

• Non-elective Contributions - direct employer contributions, if any; and
• Elective Contributions - employee salary reduction contributions.

• Reduces the employer's payroll-related costs
• Usually increases employees’ take-home pay
• Adds to the current benefit package at no additional cost to the employer
• Helps employees receive the most for their money by allowing them to select only those benefits they need

Benefits that are qualified under the Section 125 Plan are clearly defined by the Internal Revenue Code. They include, but are not limited to:

• Group Medical Insurance, including HMO's and PPO's
• Dental and/or Vision Insurance
• Cancer Insurance
• Group Term Life Insurance for employees only - up to $50,000 Face Amount
• Accidental Death Insurance
• Short or Long Term Disability Income Insurance
• Dependent Care Expense Reimbursement
• Medical Expense Reimbursement
• Health Savings Accounts

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