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Benefits of offering a Section 125 plan

PAI has been administering Section 125 Plans for companies of all sizes for over 25 years.   A Section 125 Plan allows for companies of any size to offer the option to withhold fringe benefits such as Employer Sponsored Group Health, Group Dental, Group Vision and other eligible Insurance Premiums, Health Care Reimbursement Accounts and  Dependent Care Reimbursement Accounts from their payroll on a pre-tax basis.

By doing so, the elections reduce the employees’ gross income for purposes of income tax AND the employer enjoys a substantial savings in their payroll tax liabilities.  The Section 125 Plan is exempt from all federal and state income tax along with FICA tax, which reduces the Employer’s matching Social Security and Medicare matching tax contributions.  Unemployment taxes on the state and federal level are also reduced as they are based on the lower gross taxable income. The average savings for participating employees range between 25-30%.

PAI specializes in the administration of Section 125 Plans as well as COBRA Administration, Parking and Mass transit Plans, and Consolidated Billing Services.