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Cafeteria Plan

HCCADCHCCADC 204 Posts
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Hi does anyone have a Cafeteria Plan? If so, could you give me the pros and cons of it? We might go in that direction, but I would like to hear from those of you who have it. I personally am not in favor of it. How do the employees feel about it? Does it really portray a 'fairness' to all employees? Thanks!
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  • C WilsonC Wilson 122 Posts
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    A cafeteria plan is a great way to reduce the cost of health insurance for employees, as well as saving the company money. Since the premiums are paid with pre-tax $$$ the savings to employees is usually around 30% of their premium amount and the company does not have to pay Fica, Medicare, State or Federal U.I. on the amount of the insurance premium withheld from employees paychecks.

    Check with your insurnace company, often they will administer the cafeteria plan for you at little or no cost. I actually got a suplemental insurance company to set ours up at no charge by allowing them to offer their products to our employees. I also limited the cafeteria plan to be used only for insurance premiums.

    You will have to file a form 5500 anually with the IRS.

    I think this is a great money saving benefit and would recommend it to any company who does not have one.

    Good Luck,

    Cherrye


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