
The Power of Section 125 Pre-Tax Plans for Employers and Employees
Section 125 pre-tax plans are powerful tools that help employers and employees save money on healthcare expenses. These plans allow employees to pay for eligible benefits with pre-tax dollars, lowering taxable income and reducing overall tax liabilities for the organization.
What is a Section 125 Plan?
Also known as a cafeteria plan, Section 125 lets employees choose among different benefits—like health insurance, flexible spending accounts, and wellness programs—funded pre-tax. The Capstone Plus program uses this structure to maximize savings for employers and employees alike.
Employer Advantages
Reduced payroll taxes: Lower taxable payroll means less employer tax liability.
Attract and retain talent: Offering pre-tax benefits increases the value of compensation packages.
Compliance and audit protection: Programs like Capstone Plus ensure IRS and Department of Labor compliance with full audit protection.
Employee Benefits
Employees gain access to valuable health and wellness services without additional out-of-pocket costs. Using pre-tax dollars also means more take-home pay and financial relief.
Conclusion
Section 125 pre-tax plans are win-win solutions for cost savings and employee satisfaction. Partner with Earnest Banks to implement a compliant and effective program tailored to your organization.