Most employers permit their employees to pay their group insurance premium contributions on a pre-tax basis. They do so through a Premium Only Plan as permitted by Section 125 of the Internal Revenue Code (125 Plan). In order to permit pre-tax contributions to be made to a health insurance plan or a Health Savings Account (HSA), the Section 125 Plan must be implemented. If one is already in place, the current plan probably needs to be re-stated to include HSA language.
In order to have a valid 125 Plan, the IRS says you must have:
a written plan document; and
a Summary Plan Description (SPD); and
an enrollment form signed and dated before an employee's first pre-tax payroll deduction.
25% Income Tax Savings for Employees: Employees don't pay Federal, State, Local, or Social Security taxes. **You should check with your accountant for state and local taxes other than Ohio.
8% Payroll Tax Savings for Employers: You, the employer, do not have to match Social Security taxes nor do you pay Worker's Compensation premiums (in Ohio) on employee contributions.
||For this one time set up fee, FlexBank, Inc. will provide you with a prototype written plan document, summary plan description (SPD) and enrollment form.|
|Step 1. Complete our POP document preparation application; and|
|Step 2. Make your check payable to FlexBank, Inc. for $300.00; and|
|Step 3. Mail it to:|
||FlexBank, Inc. |
1250 W. Dorothy Lane, Suite 107
Dayton, Ohio 45409