Your company will recognize the following savings opportunities with a Section 125 (Cafeteria) Plan.
- You save nearly 8% on every dollar employees redirect to the Cafeteria Plan.
- Social Security taxes will not be owed on the amounts redirected by the participating employees to the plan. (This is true of employees earning less than the maximum amount taxed for Social Security.)
- Insurance premiums may be reduced for coverages that are based on employees taxable salaries.
- Your company may also recognize a reduction for any retirement plan expense (profit-sharing or pension plan) that is based on your employees taxable salaries, if your retirement plan provides for this.
- Your company’s health insurance cost can be lowered by combining certain changes to your insurance plan with the installation of an OMNI Cafeteria Plan.
- Because of significant cost increases for health insurance and other fringe benefits, many companies would like to change or reduce the insurance coverage they provide to their employees.
A Cafeteria Plan can be implemented at the same time a change is made, and thus significantly reduce the impact of the change on the employee.
- And, of course, your company can earn interest throughout the year on the unclaimed contributions that employees deposit in the Cafeteria Plan.