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As an additional service, we can establish for our clients a Premium Reduction-Cafeteria Plan as provided under section 125 of The Revenue Act of 1978. With this plan arrangement, a tax advantage for both the employee and the employer can be realized.
Employees reduce their income by an amount equal to the cost of their insurance premium outlay (pre-tax), which in turn reduces federal, state and FICA taxes by lowering their taxable income. The established plan can cover both medical and dental insurance premiums.
Employers gain from a reduction in FICA and FUTA payroll taxes paid because of the reduced employee compensation. We will provide to you on a no cost basis the setup and continuous administration of this plan so long as we are the listed brokers of record for your employee benefits, and the enrolled members of the group meet our minimum requirement standards. |
Included in the setup and administration of your plan will be the following:
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