Cafeteria (Section 125) Services

The cost of health care benefits has increased dramatically. This increasing expense has caused many employers to reduce benefits or increase employee co-pays and deductibles - leaving employees to pay more and decreasing the overall morale. As an employer, you can do something to help ease the added expense employees face - it's called a cafeteria plan.

The basic concept is to allow employees to pay for insurance premiums and set aside a certain amount of each paycheck into an account before paying income taxes. The account is used to pay for eligible medical and dependent care with the pre-tax money. Employees have the potential to save $22.65 or more for every $100 they set aside (depending upon their tax bracket). The illustration below compares a paycheck with and without a cafeteria plan.

Employers save FICA on every dollar employees contribute to the plan. Since the employee's taxable salary is lowered, the employer will also save on other costs, i.e., FUTA, Worker's Compensation, etc.

Adding a cafeteria plan to your current benefits package is a true WIN-WIN situation for both you and your employees. Plan setup and ongoing administration is easy with Swerdlin & Company's FlexPak. We provide you with a hassle-free alternative to performing your administration in-house while offering state-of-the-art technology and customer service beyond other administration firms.

We can assist you with a full range of cafeteria plans including:

• Premium only plans;
• Flexible spending accounts;
• Health reimbursement arrangements; and
• Qualified transportation programs.

We provide the following services for all types of cafeteria plans:

• Plan development/design
• Plan takeover/redesign
• Daily processing
• Compliance testing
• Participant enrollment and communications*
• Claims processing and adjudication
• Debit cards
• Account access via website
• Participant call center *

* Spanish available