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Pre-Tax deduction

njmhr1109njmhr1109 18 Posts
in Benefits & Leave Vote Up0Vote Down
Hello,

Can we deduct health insurance automatically on a pre-tax basis for all employees without requiring a signature?

Are there any laws about this?

Thanks,
njm




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Comments

  • 4 Comments sorted by Votes Date Added
  • KAMINSKIKAMINSKI 31 Posts
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    Need to do a Section 125 Plan. If it is for premium only that is not rocket science and can be done easily in house. Type in Section 125 plan in your search engine. Some really good samples out there.

    They use POP as abbreviation for Premium Only Plan. Many HR people will tell you that it is very difficult and should be done by a lawyer etc. etc. For a POP I disagree with that totally.

    If you want to email me directly throughout the process I can help.

    There area also a lot of people out there that do this for companies. I think for a POP it is a waste of money.

    Now if you get into a Flexible Spending Plan...well that's another story.

    [email]Rkaminski@spearmgmt.com[/email]

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  • njmhr1109njmhr1109 18 Posts
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    Here in Massachusetts we have a Flexible Spending Account. We also ask new employees if they want their health insurance deduction pre-tax or post.

    We have a plant in Alabama that does not have a Flexible Spending Account/Section 125 plan and also does not deduct health insurance pre-tax.

    If we deduct the health ins. pre-tax, I figure we could save the company around %50k. I did not know it went hand in hand with Section 125.
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  • lnelsonlnelson 670 Posts
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    We just starting offer the FSA's and our ees love it. It has reduced our tax liabilities and theirs.

    But I agree with Kaminski if you are only looking at Health being pre-taxed Section 125 should be easy to do on your own without legal counsel but I would speak to your insurance broker they may handle this for you and at no cost to the CO.

    JMO,
    Lisa
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  • marcmarc 3,126 Posts
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    [font size="1" color="#FF0000"]LAST EDITED ON 06-18-04 AT 12:15PM (CST)[/font][br][br]To deduct anything besides mandated taxes from an EEs check requires specific authorization from the EE, regardless of whether or not you have a section 125 plan.

    To get the pre-tax treatment, you must have a section 125 plan.
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