Guest mike godsey Posted November 22, 2001 Posted November 22, 2001 a local school district contributes money into a health plan for employees. They have a 125 plan. They do not allow employees to spend that money on other benefits or take the cash. Is this legal? The benefits book we are using in our class indicates there must be a "cash" option.
Guest Jeffrey N Posted November 27, 2001 Posted November 27, 2001 When a 125 plan uses the term "cash option", it is refering to an employee receiving their "full pay", then being taxed and any benefits are deducted "after" taxes are taken. So in essence you are paying tax on the premium. If a plan uses employer credits, by adding a "fixed" dollar amount to your salary, any amount "leftover" from the cost of the premium would then come to the employee in the form of "taxable" income. If you need more feel free to email me.
Guest ronc Posted December 6, 2001 Posted December 6, 2001 If the cash option under Sec 125 results in post-tax premiums, is it possible to have a "pre-tax premium only" requirement in the plan? In other words, eliminate the post-tax option entirely? tks
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