SECTION 125

Section 125 is a program that allows employees to have certain eligible benefits deducted from their paycheck tax-free. You can choose to participate in all, part, or none of the following options:

Premium Only Plan (POP) – This is the part of the Section-125 plan that allows you to have certain eligible plans deducted from your check before taxes are taken. Deductions such as Health, Dental, Vision, and certain supplemental benefits like Accident and Cancer plans are eligible to be run through the Section-125 POP plan.
FSA – Flexible Spending Accounts allow for monies to put money aside, tax-free, to cover out-of-pocket eligible medical, dental, and vision expenses, not covered by insurance. The total annual election is available on the first day of the new plan year and the IRS has even added a carry-over provision that allows you to roll over up to a max of $500. Annual contribution limits for 2021 are set by the IRS at $2,750.
Dependent Care – Allows employees with certain dependent care expenses, such as daycare to be run through payroll tax-free. Funds are only available after they have been deducted and posted to your account. The advantage is that the deduction comes out tax-free, up to $5,000 per year per family, which saves a lot on taxes.

Once elections are made, you must remain in the plan until the end of the plan year, or an eligible qualifying event occurs that would give you a 30-day window to make certain changes.

One-on-one employee meetings are held in October of each year. At this time an employee may elect to make plan changes. These changes go into effect on January 1, but are reflected in the December payroll.

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SECTION 125