Legally Approved Cafeteria Plans for Employees

February 26th, 2009

Back in 1978 Congress passed the Cafeteria Plans as described in the IRS Code Section 125.  This has allowed many employees the benefits of saving on their income taxes and employers to save on their payroll taxes.  The recent economic slump has seen a rise in more employers offering these kinds of plans to their qualified employees.  The 125 section cafeteria plans are employer sponsored plans that are separate from the actual health insurance plans they offer.  It is a completely voluntary agreement for the employee to have the choice of using pre tax wages to pay for their health benefits.  It is a win win situation for all parties and well worth it as there are no costs to implement them.

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Entry Filed under: Business

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