125 Cafeteria Plans with BASE® - And No, We Aren’t Talking About Food!

According to Entrepreneur, one of the most underrated and underused employee benefits available for small businesses today is outlined in Section 125 of the U.S. tax code - the Cafeteria Plan.

BASE® offers 4 plans to further customize an employer's current benefit offering... and no, we aren't talking about bringing food to eat!  These 125 Cafeteria Plans:  Premium Only Plans (POP), Flexible Spending Account (FSA), Limited Purpose FSA, and Dependent Care Assistant Plan (DCAP) can further supplement your current Health Reimbursement Arrangement (HRA).  Employers that sponsor a BASE® 125 Cafeteria Plan allow employees, who are paying for medical expenses, insurance premiums, or dependent care expenses, to do so on a pre-tax basis.

Premium Only Plan (POP) - Premium Only Plans are established to pay for employer-sponsored benefits.

With a POP, individuals set aside money which can be used for medical, dental, vision, group term life, and voluntary supplemental insurance

Flexible Spending Account (FSA) - Flexible Spending Accounts are established to pay for qualifying medical expenses.

With an FSA, individuals set aside money which can be used for copays, dental care, vision care, chiropractor, and prescriptions.  100% of the FSA election is available on day one to employee participants. 

Limited Purpose FSA- Limited Purpose Flexible Spending Accounts are established to strictly reimburse eligible dental and vision care expenses.  This type of plan is for employees who are enrolled in a High Deductible health Plan (HDHP) and are enrolled in a Health Savings Account (HSA). 

With a Limited Purpose FSA, individuals set aside money to be used for only eligible dental and vision care expenses, include orthodontia.  The employees have the opportunity to build contribution amounts to their HSA while still receiving a pre-tax benefit for eligible dental and vision expenses. 

Dependent Care Assistant Plan (DCAP) - Dependent Care Assistant Plans are established to pay for qualifying adult or child care expenses. 

With a DCAP, a person can set aside money to use for childcare or daycare costs, adult daycare, before or after school programs, or summer programs or camps.  It can be used for care when it is provided while parents are working or at school.  100% of DCAP election is NOT available on day one to employee participants.

Advantages of the Cafeteria Plan

A BASE® 125 Cafeteria Plan can create savings for both the employer and employee.  Employees will see an increase in take-home pay due to the taxable income being reduced; it is a convenient way to save and budget for eligible healthcare and daycare expenses, and know that as they continue to work, they are establishing funds to help pay for these costs.  Employers will see more because the pre-tax benefits aren't subject to the Federal Social Security (FICA) tax, Medicare, as well as, Federal Unemployment tax (FUTA). 

BASE® provides:

  • Web Portal for both Employer & Employee
  • Summary Plan Document (SPD) & Plan Documents
  • Adoption Agreement (AA)
  • Administrative Guidelines & Forms
  • Claims Substantiation
  • Option for Employer to Reimburse Via Direct Deposit or Check
  • HIPAA Privacy
  • Non-Discriminatory Plan Designs
  • On-Going Compliance & Product Updates
  • Service & Support

No matter what kind of business structure you may have, BASE® can help you customize your 125 Cafeteria Plan that will benefit BOTH you, the employer, and your employee.  Contact us today to learn more about the benefits of a 125 Cafeteria Plan and other money saving benefit strategies.

Selecting a Benefits Administrator – Making the Easy Choice with BASE®

Business owners make difficult decisions every day. Situations come up that you may or may not be prepared for. Every day employers take steps to propel their business forward; inching closer to their overall goals and helping employees reach theirs as well. However, decision making isn’t easy. We all deal with things we do not want to and are forced to make the hard choices. But, not all decisions are made to be difficult, picking BASE® as your benefit administrator is easy and a decision you won’t regret.

I recently read an article about reaching your full potential and how the difference between headwind and tailwind has an effect on our perception of situations. Like riding your bike into the wind, facing challenges we are not prepared for can seem impossible. However, with the right resources and assistance to help face situations that come up, it can be easier. So now instead of riding into the wind, it is like going down a hill with your own expertise and confidence pushing you forward to a solution. This article stresses the importance of being grateful for the wind at your back and recognizing the push it gives you to reach the end goal.

BASE® is the wind at your back. BASE® Business Partners and clients around the country notice the extra strength we put behind our products and services. For example, with our ERISA Wrap, we just don’t hand you the documents and wish you the best, we provide a complete compliance package and guarantee that you stay within the correct regulations. Lisa, an ERISA Wrap client, recently shared, “My experience in setting up a BASE® ERISA Wrap has been incredible. BASE® is courteous and thorough, and their follow up is unlike any other company.”

All of our products work like this because the staff at BASE® works diligently on our customer service, setting us apart from other benefit administrators. When a BASE® HRA client first signs up, they receive the necessary information to walk them through the process of how the product works to ensure understanding and accuracy. Since not everyone is an expert when it comes to tax advantage benefit plans, we take the guesswork out of our products. Alex, an HRA client, states, “The BASE® staff takes a complex plan and makes it simple. The welcome packet, payroll reminder emails and customer service make the whole experience easy to understand. The plan has become part of my monthly routine and entering my expenses is so easy. What you pay BASE® is well worth it in the tax dollars you save.”

People are faced with difficult “headwind” decisions every day, but BASE® isn’t one of them. Selecting BASE® as a benefit administrator is a “tailwind” decision to provide you the push to reach your goals. Contact BASE® today to find out how you could benefit from our products and services!