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A Cafeteria
Plan is advantageous to both employees and employers in addressing
increasing health care costs. Employees benefit by having
the opportunity to pay for certain employer sponsored benefits
with pre-tax payroll deduction dollars, which increases their
take home pay. As a result, each payroll dollar has greater
purchasing power for employees. Employers benefit by offering
a Cafeteria Plan to employees because it reduces employer
payroll taxes while increasing employee satisfaction.
The following
can be offered in a Cafeteria Plan:
Premium
Only Plan (POP)
A Premium
Only Plan (POP), under a Cafeteria Plan, allows employees
to pay insurance premiums with pre-tax payroll deduction dollars
for the following employer sponsored benefits:
- Health
- Dental
- Vision
- Accidental
Dealth and Dismemberment
- Group
Term Life (up to $50,000)
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Flexible
Spending Accounts (FSA)
Cafeteria
Plans allow employees to make pre-tax payroll deduction contributions
into one or both of the following:
- Unreimbursed
Medical FSA
- Dependant
Care FSA
Unreimbursed
Medical FSA
An Unreimbursed
Medical FSA provides an opportunity for employees to request
reimbursement from their pre-tax payroll deduction contributions
for out-of-pocket medical expenses not reimbursed through
insurance. Out-of-pocket medical expenses that qualify include
co-payments, insurance deductibles, prescription and over-the-counter
drugs, dental expenses including orthodontia, and vision services
including eyeglasses and contact lenses.
Dependant
Care FSA
Employees
may benefit by participating in a Dependant Care FSA and requesting
reimbursements from their pre-tax payroll deduction contributions
for qualifying dependent care expenses for their eligible
children or other dependents.
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