IRS Section 125 Plan Information

The most complete list of IRS Section 125 Plan information and affordable resources:

Section 125
This is the portion of the IRS Code that defines Section 125 employee benefits that allow employees to pre-tax or avoid paying taxes on insurance premium, medical expense, and day care expenses for children or adults. Section 125 plans require a formal plan document and summary plan description before deductions can be made pre-tax. Many employers take IRS Section 125 deductions without the knowledge that a formal plan document and summary plan description are required by the IRS and DOL. See the drop-down menus above for more information about IRS Section 125 components. Or call and speak to a Section 125 expert toll-free at 1-888-755-3373.

Section 125 Plan
Section 125 Plan is the formal "Plan" established by an employer for the benefit of their employees. The word "Plan" refers to the Plan Document that allows the benefit in makes it compliant with IRS and Department of Labor law. Without the Section 125 Plan the benefits will be disallowed by the IRS and/or the DOL.

IRS Section 125
This is the portion of the tax code that allows IRS Section 125 pre-tax deductions to be made for insurance premium (POP), medical expenses (MERP or FSA), and dependent child care expenses (Dependent Care FSA). IRS Section 125 is the part of the code allows most all of the flex benefits listed in the drop-down menus at the top of the page.

IRS Section 125 Plan
The IRS Section 125 Plan is the formal plan established by an employer to allow their employees to take IRS Section 125 Plan tax deductible benefits such as insurance premium (Premium Only Plan), medical expense (Health or Medical FSA), and dependent care expenses (Dependent FSA). IRS requires a Plan Document be in place to take these deductions.

Section 125 Premium Only Plan
Section 125 Premium Only Plan or sometimes called POP plans allow employees to pre-tax or avoid paying state and federal taxes on their portion of insurance premium. Premium Only Plan arrangements are especially valuable to employers as health insurance continues to increase out-of-control. Employees can also use the Section 125 Premium Only Plan to pre-tax supplemental insurance such as dental, vision, accident, term life to $50,000, cancer policies, and many other ancillary benefits. Premium Only Plans allow employees to save approximately 30% in taxes while employers generally save 8% to 10% in matching taxes.

FSA Section 125
An FSA Section 125 is the term used to describe Section 125 Flexible Benefit Plans or FSA Plans. An FSA could be a medical expenses plan designed to reimburse out-of-pocket medical expenses, sometimes called a Medical FSA or a Health FSA. The term FSA Section 125 is sometimes used to describe a dependent care FSA Section 125 used to reimburse dependent care expenses using employee pre-tax contributions. For more information on dependent care FSA plans see this link Dependent Care Assistance Plans.

POP Section 125
A POP Section 125 Plan is another term used for the Premium Only Plan. POP Section 125 plans do essentially the same thing, they allow employees to pretax insurance premium and supplemental insurance under IRS or Internal Revenue Service Code.

Section 125 Cafeteria Plan
Section 125 Cafeteria Plan is the term used to explain the combination of the Premium Only Plan or POP, the FSA for medical expenses, and the FSA for Dependent Care expenses. All three components make up the Section 125 Cafeteria Plan. The term Section 125 Cafeteria Plan is more appropriate when the employer is allocating a certain budget for each employee. The employee can then spend this budget on insurance products, reimbursement of out-of-pocket medical expenses or dependent care expenses much the same way they would pick food items from a cafeteria setting.

Internal Revenue Code Section 125
Internal Revenue Code Section 125 is the portion of the IRS Code that allows Section 125 Premium Only Plans, FSA Section 125 Plans for medical and dependent care expenses. See a copy of the Internal Revenue Code Section 125 here.

IRS Code Section 125
IRS Code Section 125 is another term used to describe the portion of the Internal Revenue Code that allows the Premium Only Plan or POP, and the FSA part that allows for medical expenses to be reimbursed as well as dependent care expenses. IRS Code Section 125 requires employers to establish a formal plan document before using this portion of the IRS code to pre-tax benefits.

Section 125 Flexible Spending Account
A Section 125 Flexible Spending Account is a special account used by an employer to allow his employees to pre-tax medical expenses and dependent care expenses. Flexible Spending Accounts are normally employee funded using pre-tax dollars. Employees then accumulate expenses and turn them into either the employer or plan administrator to be reimbursed through the Flexible Spending Account.