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Showing results for tags '125'.
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Can an employer require employees to take a certain election through a 125 plan? If it's a requirement, then isn't it not an election anymore? The employer with the union and the CBA can create the cafeteria menu, but can they force an employee through the cafeteria line? If the CBA states: " fringe benefit 1, fringe benefit 2, and fringe benefit 3 are the responsibility of the employee through the 125 plan". Employer states, there will be a mandatory wage deduction for benefit 1, because the union has "elected" option A on your behalf without any express authorization, doesn't this violate the principle of 125 plan choice? Thank you in advance for your thoughts. -
I hope to have an "easy answers" question, but I don't know.... Plan compensation is defined as W-2. Exclude fringe benefits. Auditors are picking apart the profit sharing calculation. In the employers words "When the Profit Sharing was calculated, the Wage base included pretax deductions, Flex Spending and Health Insurance. They(auditor)believe this is incorrect and those deductions should not be included for calculating the Profit Sharing". With w-2 compensation per the document, I would expect the wage base plus pretax deductions, Flex spending to be included. I have a question whether Health insurance deductions are included in compensation. 1. I always thought Flex or Section 125 deductions were to be added to W-2 compensation. Correct? 2. Are Health Insurance deductions added to W-2 compensation? Thanks
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The only advantages I can think of are: 1. No or minimal basic life is offered so buying voluntary life through cafeteria plan lets you take full advantage of the $50,000 non-taxable coverage; or 2. The voluntary life rates are higher than the imputed income rates so tax on imputed income is less than the tax paid when buying voluntary life with post-tax dollars. Am I missing something?
