Section 125 premium only

We currently have a Section 125, premium only plan that is administered by an outside source. Does anyone have this type of plan that they administer themselves? The only thing the outside source does is prepare the plan documents and track employees' contributions. I don't see any reason why we couldn't do that ourselves. Your thoughts please.


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  • As a non-profit government entity we do half of that. Our TPA (AFLAC) prepares the documents, I keep track of the employee contributions. They are free because we offer their products to employee's. They're 100% employee deducted, of course. I don't want to prepare the plan document as I don't want to have to write new language every time some new law would affect it.
  • We also have a 125 POP (Premium only plan). Our Broker (who has an attorney on staff) helped us write the document originally back in about 1979. We are now in the process of redoing/updating it. I guess you say we administer it. We have the employees sign the "form" each time there is an enrollment or change and our "Trust Trustee" (who is the Controller who acts for the President) tracks the contributions and files the 5500 each year. Our Auditor audits and gives an opion on the Plan. I can't imagine why you would pay someone outside to do this unless you are a huge company or so smally you don't have an accounting/finance dept. E Wart
  • EWart: You are doing exactly what we want to do so I guess it can be done. We only have about 180 people covered on our benefits, so I can't see paying an outside source to do this either. Thanks for the information to those who responded.
  • We are small and have a finance department, but we still have a TPA do some of ours.

    In our case, the TPA adiministers the FSA and the Dependent Care portions. We want someone else deciding whether or not FSA items are qualified to reimburse. For various reasons, we do not have to file the 5500 report.

    We handle all enrollments, payroll deductions and the like.
  • We do ours inhouse...very similiar to E Wart. We use a tax attorney that keeps us abreast of changes and who updates the plan document as needed. We also have a dependent care account and a medical reimbursement account. We have not had any problems administering this in-house.
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