The Section 125 Plan Document Package includes:
The Premium Conversion Plan Document
Documents are personally prepared for each client. Document should be accepted and signed by an Officer of the Company and kept on file for review by employees, accountants, IRS, etc.
Premium Conversion Summary Plan Description
Required for each employee. Explains the Plan Purpose, Who is Eligible, How To Enroll, When You May Participate, About Social Security Taxes, About Income Taxes, Future of the Premium Conversion Account, Insurance Contracts, COBRA Continuation, Administrative Facts, ERISA Rights Statement, and the Schedule of Benefits, Coverage Tiers and Cost of Coverage's.
Premium Conversion Election Form
Personalized for the Company it will include Salary Deduction Agreement, and Benefit Election data of health plans included.
OPTION: Dependent Care Flexible Spending Account Document
Includes necessary documents to establish Section 129 Dependent Care Flexible Spending Account. Also includes all administrative forms customized for each client including: Employee Election Form to participate in the Dependent Care Flexible Spending Account, Change Forms, and Claim Forms. Includes Summary Plan Description and Question and Answer Section for distribution to each employee.
OPTION: Medical Expense Reimbursement Flexible Spending
Includes necessary documents to establish Section 105 Medical Expense Reimbursement Flexible Spending Account. Also includes all administrative forms customized for each client including: Employee Election Form to participate in the Medical Expense Reimbursement Flexible Spending Account, Change Forms, and Claim Forms. Includes Summary Plan Description and Question and Answer Section for distribution to each employee.
Includes sections on: Flex Plan Administration, Non-Discrimination Testing, and Reporting and Disclosure information. The Ledger Company can administer the Dependent Care Flexible Spending Account or the Medical Expense Reimbursement Flexible Spending Account (FSA) through our payroll program. You will be provided with instructions regarding FSA setup, maintenance procedures, etc.
Includes minutes of the Corporate Board meeting to adopt the Section 125 Plan as an employee benefit.
Flexible Spending Account Administration
Since individual accounts must be maintained, the medical benefit portion of a Cafeteria Plan will require administration by the employer. The employer will need to account for the following:
Advantages of Including the Medical Expense Reimbursement Option
Advantages of Including Dependent Care Option
The dependent care benefit option is comparable to the medical benefit option discussed previously. The similarities are:
Administrative costs will vary significantly between plans. As discussed previously, a plan which offers insurance only would require virtually no administrative costs. (The Cafeteria Plan deduction is handled in a manner similar to payroll deductions for insurance premiums.) On the other hand, the remaining benefits would require additional expense. The amount of administrative expense that an employer is willing to absorb may be affected by one of the following factors: