What does a Section 125 plan cover?
Feb 13, 2024 23:00:27 GMT -5
Post by prantogomes141 on Feb 13, 2024 23:00:27 GMT -5
No matter which benefits you choose to include in your plan, you must specify in writing what your Section 125 plan encompasses, how employees can qualify for these programs and how they can choose the benefits that are right for them. According to Section 125 of the Internal Revenue Code, cafeteria plans can cover the following qualified benefits: Accident and health benefits: Exclusions are Archer medical savings accounts and long-term-care insurance. This supplemental health coverage policy deals with employee medical expenses for transportation to hospitals and income lost from not working during injury recovery periods.
Dependent care assistance plans (DCAPs): A dependent care flexible spending account helps cover the cost of care for qualifying dependents. The IRS defines qualifying dependents as all children 12 and under who live with the employee. Those aged 13 or older Algeria Telemarketing Data also qualify if their physical or mental disabilities require the employee’s supervision and the person is regularly present in the employee’s household for at least eight hours per day. Adoption assistance: An adoption assistance plan partially or fully covers employee expenses for child adoption. These plans typically include paid or unpaid leave for employees who have recently adopted children. Information and referral services may also be covered.
Group-term life insurance: Group-term insurance refers to the standard employer-based health insurance model but, in the case of cafeteria plans, this model is used for life insurance, not healthcare. As an employer, you will take out a policy and sign a contract with a life insurance provider. You can then offer your employees life insurance plans as benefits through your cafeteria plan. Health savings accounts (HSAs), including those that cover long-term-care services: Through HSAs, your employees can cover their qualified medical expenses using the pretax dollars you set aside in your Section 125 plan. These expenses include insurance deductibles, co-insurance, co-payments and more, though usually not insurance premiums. Note that only employees who have high-deductible health plans can contribute to HSAs.
Dependent care assistance plans (DCAPs): A dependent care flexible spending account helps cover the cost of care for qualifying dependents. The IRS defines qualifying dependents as all children 12 and under who live with the employee. Those aged 13 or older Algeria Telemarketing Data also qualify if their physical or mental disabilities require the employee’s supervision and the person is regularly present in the employee’s household for at least eight hours per day. Adoption assistance: An adoption assistance plan partially or fully covers employee expenses for child adoption. These plans typically include paid or unpaid leave for employees who have recently adopted children. Information and referral services may also be covered.
Group-term life insurance: Group-term insurance refers to the standard employer-based health insurance model but, in the case of cafeteria plans, this model is used for life insurance, not healthcare. As an employer, you will take out a policy and sign a contract with a life insurance provider. You can then offer your employees life insurance plans as benefits through your cafeteria plan. Health savings accounts (HSAs), including those that cover long-term-care services: Through HSAs, your employees can cover their qualified medical expenses using the pretax dollars you set aside in your Section 125 plan. These expenses include insurance deductibles, co-insurance, co-payments and more, though usually not insurance premiums. Note that only employees who have high-deductible health plans can contribute to HSAs.