Employer vs. employee contributions to Sec. 125 plan

[Guest Dave Peckham]

Our firm does not administer Sec. 125 plans, so I'm admittedly a little green in this area.

I understand employee salary deferrals to a Sec. 125 plan. When would an employer ever want to contribute to a Sec. 125 plan?

[SLuskin]

Our firm does not administer Sec. 125 plans, so I'm admittedly a little green in this area.

I understand employee salary deferrals to a Sec. 125 plan. When would an employer ever want to contribute to a Sec. 125 plan?

Dave, lot's of large employers use flex credits, which are employer contributions. We have many employers who either contribute a per payroll amount or a flat annual amount to the FSA accounts for their participants. We also had a client who wanted to be "an employer of choice" in their region. They matched DCAP contributions dollar for dollar.

[GBurns]

An employer would contribute if they want to reduce the emplooyees cost of health (or other) benefits especially the costs other than that of the medical coverage.