Section 125 Plan

Learn how a Section 125 Plan (Cafeteria Plan) helps employees save on taxes while employers reduce payroll costs. Discover real-world examples like the CHAMP Plan from The Policy Shop.

Tax-Saving Benefits for Employers and Employees (Section 125 Plans)

💡 What is a Section 125 Plan?

A Section 125 Plan, also known as a Cafeteria Plan, is a tax-advantaged benefits program that allows employees to choose from a menu of pre-tax benefit options. It’s called a “cafeteria plan” because, like a cafeteria, employees pick the benefits that suit their needs.

These plans are governed by Section 125 of the Internal Revenue Code and are a win-win:
✅ Employees get to reduce their taxable income
✅ Employers save on payroll taxes

When employees opt into a Section 125 Plan, the money used for these benefits is deducted from their paycheck before taxes, reducing their overall taxable income.

🔍 Why Employers Love Section 125 Plans

Offering a Section 125 Plan is a smart move for businesses. Here’s why:

• Payroll tax savings: Employers don’t pay FICA or FUTA taxes on pre-tax contributions
• Boosts recruitment and retention: A customizable, tax-free benefit plan attracts top talent
• Increases employee satisfaction: More choice, less out-of-pocket cost

👩‍⚕️ The CHAMP Plan by The Policy Shop

The CHAMP Plan, presented by The Policy Shop, is an innovative example of how a Section 125 Plan can include real health benefits — not just tax perks.

With the CHAMP Plan, employees can enjoy:

• Unlimited no-cost access to virtual care and urgent care
• Free prescriptions
• Mental health support
• At-home lab testing
• Wellness rewards for healthy habits

This plan can be fully integrated under a Section 125 structure, meaning employees receive all these benefits tax-free, and employers still reduce payroll costs.

➡️ Discover a Simpler Way to Stay Healthy with the CHAMP Plan

🧠 Related Insights from The Policy Shop

Want to go deeper into optimizing employee benefits? Check out these popular resources:

• 💵 How Pre-Tax Health Plans Help Employees Save Money
  — Learn how everyday workers can access premium care with no deductible.
• 🧪 Revolutionary At-Home Lab Testing is Here
  — From blood panels to cholesterol, CHAMP lets employees test from home and track results with ease.
• 🧘‍♂️ Mental Health Support Is Just a Tap Away
  — Stress less with on-demand therapy, peer support, and AI-driven mental health tools.
• 👨‍👩‍👧‍👦 Family-Friendly Coverage Including Virtual Vet Care
  — Even furry family members get access to 24/7 care.

📌 Final Thoughts: Is a Section 125 Plan Right for You?

If you’re an employer looking to save money and boost benefits, or an employee who wants to maximize their take-home pay while improving access to care — a Section 125 Plan is a smart solution.

Pairing it with innovative plans like the CHAMP Plan by The Policy Shop brings modern, mobile-first healthcare directly into your hands — all tax-free.

✅ Ready to Offer CHAMP Under Your Section 125 Plan?

📲 Contact The Policy Shop today to customize your team’s benefits package with CHAMP — a tax-friendly health solution that employees will actually use.