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Opt out plans


Guest Liesl
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Guest Liesl

My company is considering an opt out plan to save money on our health insurance costs. Does anyone have a plan they would like to share? I have had suggestions of 40% of premium to flat dollar amounts. I would like some more information before I make my recommendation. Thanks!

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I am assuming that you have a Section 125 Plan. If you don't, you should adopt one to take care of the constructive receipt problem caused by offering cash in lieu of health insurance. There is no "plan" as such. We have clients who give employees 100% of premiums saved in their paychecks all the way down to a few hundred dollars. Some clients only alow employees to use the opt out money on a pre-tax basis through a IRC Section 125 Plan. Other clients make a tiered cash out based on taxable or non taxable use. Each employer is different and adopts a plan that seems to accomplish its objectives at the time.

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