How a Section 125 Plan Saves You Money & Boosts Benefits

Section 125 Plan Saves You Money & Boosts Benefits

Let’s be honest—healthcare is expensive. But what if you could cut costs, boost your take-home pay, and get better benefits all at once? Sounds too good to be true, right?

That’s exactly what a Section 125 Plan does! This IRS-approved plan lets employees pay for health benefits with pre-tax dollars, lowering taxable income and putting more money back into your paycheck. (How a Section 125 Plan Saves You Money & Boosts Benefits)

🔥 Employees win. Employers win. Everyone wins. 🔥

💰 What’s in it for you?
Lower healthcare costs – Use pre-tax dollars to pay for insurance!
Bigger paycheck – Less taxable income means more take-home cash.
Employer perks – Lower payroll taxes while keeping employees happy.

👉 Want to start saving? Contact The Policy Shop to learn more!

🔗 Learn how Section 125 Plans help employees and businesses save BIG

What Is a Section 125 Plan?

A Section 125 Plan—also called a Cafeteria Plan—allows employees to pay for healthcare benefits with pre-tax dollars. This lowers taxable income, reducing the amount employees and employers owe in taxes.

Tax savings for both employees & businesses
Lower healthcare costs through pre-tax deductions
Flexible benefit options to meet diverse employee needs

🔗 Learn more about how Section 125 Plans save employees and businesses money

 

How Does a Section 125 Plan Work?

When an employer sets up a Section 125 Plan, employees can choose to contribute pre-tax earnings toward eligible benefits such as:

  • Health insurance premiums 🏥
  • Flexible Spending Accounts (FSAs) 💳
  • Dependent care expenses 👶
  • Health Savings Accounts (HSAs) 🏦

Since contributions are deducted before taxes, employees keep more of their paycheck while getting the coverage they need.

🔗 Discover how Section 125 Plans optimize healthcare savings

 

Benefits of a Section 125 Plan

For Employees:

Save on healthcare costs by reducing taxable income
Increase take-home pay without earning more
Gain access to pre-tax benefits like FSAs and HSAs

🔗 How Section 125 Plans help employees cover unexpected medical costs

For Employers:

Lower payroll taxes by reducing taxable employee earnings
Boost employee satisfaction & retention with better benefits
Attract top talent by offering competitive tax-advantaged perks

🔗 Why small businesses need Section 125 Plans