Cafeteria Plans Provide Additional Employee Benefit Options

Nov. 5, 2009 - PRLog -- More than three months ago we heard that real healthcare reform would be passed in the House of Representatives by July 31st, 2009. This plan was to revolve around President Obama’s three core principles – to reduce costs, guarantee choice, and ensure every American has quality, affordable health care.

Small business owners don’t have to wait another three months. Today, BASE® provides a Cafeteria Plan for businesses allowing employees to choose between different types of benefits. These plans provide much needed tax savings and increases spendable income. Employees’ pretax contributions are not subject to federal, state, or FICA (SS/Medicare) taxes. Ultimately saving employees approximately 25 cents on every dollar spent on health care if utilized through a cafeteria plan option. At the same time, employers save on the employer portion of FICA, FUTA, and Workers’ Compensation premiums.  

Today employees may be able to save with the following options, including the new Health Care Premium Reimbursement option, when sponsored by an employer:
- Premium Only Plan (POP): providing an option that can be utilized by employees to pay their insurance premium expenses on a pre-tax basis for group health insurance coverage.
- Flexible Spending Account (FSA): allowing employees to pay their out-of-pocket medical expenses on a pretax basis.
- Dependent Care Assistance Plan (DCAP): giving employees an opportunity to pay their child and/or dependent care expenses on a pre-tax basis.
- Health Care Premium Reimbursement (HCPR): allowing employees with no corporate group health plan to obtain their own health care insurance and have the option to pay for it on a pretax basis through payroll.

Cafeteria plans are one of the best ways for employers, facing a turbulent economy, to ensure quality, affordable health care for their employees.

Roughly a third of the 50 states have adopted some form of state mandated, tax free, cafeteria plans. With more states choosing to mandate cafeteria plans, it is critical to educate employers on the advantages of these plans.

BASE® recognizes the increasing need by the consumer for service and education to properly utilize these types of plans. It is the service and education provided by BASE® that has helped clients increase employee participation from 30% to 80%. Confirming that a little education goes a long way, not to mention the payroll taxes that are saved when plans of this nature are established.  In turn it’s proven that healthcare savings don’t need to wait until tomorrow for reform to take shape, when plans like a BASE® 125 Cafeteria plan already exist today.

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BASE® prides itself in offering a variety of quality employee benefit products and services, developed to meet the needs of virtually any small business owner. Whether employers are looking to enrich their current benefit plans, off set benefit cutbacks, or implement cost saving measures, BASE® works diligently to ensure that each plan meets the specific needs of each client.

We offer a variety of plans including…

Health Reimbursement Arrangement (HRA)
SamplePay®
HRA+
125 Cafeteria Plan
- Flexible Spending Account (FSA)
- Dependent Care Assistance Plan (DCAP)
- Health Care Premium Reimbursement (HCPR)
- Premium Only Plan (POP)

To find out more about HRAs and Cafeteria Plans visit www.baseonline.com or contact a Benefit Specialist at 800-309-8012.