IRS Section 125 plans go by different names – cafeteria plan, flex plan, pre-tax plan, premium-only plan (“POP”). All refer to the same concept and purpose: Under longstanding IRS rules, for an employer to allow pre-tax employee payroll deductions for eligible health and welfare benefits, the organization must have a written plan that complies with Code Section 125. This requirement is old, but it remains one of the basic and significant compliance requirements for employers sponsoring benefit programs.
Since every employer needs a current and compliant Section 125 plan . . .
we may as well make it easy.
Simple 125 is a plan document service designed to cover Section 125 plans for employers currently allowing or intending to allow pre-tax premiums for any or all eligible benefits, including Health Savings Account (“HSA”) bank account contributions. With the plan in place, all employee deductions for eligible benefits are exempt from federal income tax, state income tax, and FICA/Social Security. Also, the employer is exempt from the FICA/Social Security match on all employee deductions. (See note below regarding Section 125 plans with Flexible Spending Account options.)
Simple 125 is quick, affordable, and effective.
Streamlined
Data collection is streamlined with an interactive online form, and our commitment is that we will deliver the document within 24 hours of receiving the data and payment. In many cases, the project is completed in the same day or a matter of hour(s). Feedback on cost, responsiveness, and turnaround time has been universally positive.ha
Low Fee
We offer a $195 standard fee for the Simple 125 plan document service.
Payment may be made by check or online.
Single Document
Section 125 plans are traditionally represented by two legal documents: the Plan Document and Summary Plan Description (“SPD”). Simple 125 has merged them into a single document for ease of use and maintenance by employers. This is not a basic template service. Our plan document is drafted by experienced benefits attorneys, customized for your organization, and reviewed by a compliance specialist.
If you have any questions about Simple 125, contact us.
Note – Flexible Spending Accounts: Health FSAs and Dependent Care FSAs are eligible benefits under Section 125. However, if an employer has FSAs, we recommend that the plan utilize plan documents provided by the FSA administrator in order that all plan details are consistent with administration. We can assist with an analysis of any employer’s situation.