Check out the VBSR Cafeteria Plan!
Offering quality benefits is a great way for you to attract and retain employees. That’s why VBSR offers a discounted cafeteria plan for VBSR members. Do you have employees who pay for health care expenses? Or child care expenses? This plan can save them money, with just a bit of administration time on your part.
How does a cafeteria plan work?
The plan saves your employees money using pre-tax dollars for insurance premiums, health care and dependent care expenses. It also saves your organization money as there is no FICA or FUTA tax on wages your employees redirect to the cafeteria plan. Your employees can save in three ways:
- Dependent Care Expenses
Employees can use pre-tax dollars to pay dependent care expenses — up to $5,000 per family each year to qualified providers.
- Health Care Expenses
Employees can use pre-tax earnings to pay for out-of-pocket health care expenses (e.g. vision, co-pays).
- Insurance Premiums
In some cases, the employee’s share of insurance premiums (health, dental, supplemental) can be paid with pre-tax earnings.
Who can participate in a cafeteria plan?
If you offer group health insurance, employees eligible for your plan can sign up for the cafeteria plan. (If you’re a sole proprietor, partner in a partnership, or owner of more than 2% of a Subchapter S corporation, you may not participate but your employees may.)
Administering a cafeteria plan is not difficult, you just need to be meticulous. You can administer the plan yourself or hire someone to do it. Cafeteria Plans are also known as “flex spending” or “Section 125” plans. In short, they let employees use pre-tax dollars for benefits they choose, with some restrictions.
Here are some reasons why you might choose to start a cafeteria plan:
- Employees have more money in their pocket, without extra cost to you, the employer.
- You can save money with social security (FICA) and federal unemployment (FUTA) taxes you don’t have to pay.
- Different employees can choose different benefits-the ones best suited to their individual needs.
- The added benefit can help attract and retain good employees.
In short, these plans are a cost-effective way to offer employee benefits! The VBSR Cafeteria Plan is available to all members for a discounted fee of $150.
Many thanks to Future Planning Associates, Inc. for helping us provide this VBSR member benefit!