Section 125 Plans

Offering competitive employee benefits is critical to attracting and retaining top talent. A Section 125 plan—also known as a cafeteria plan—can offer tax savings for both employees and employers while providing quality coverage options for your employees.

The Capital Group can help your business find the right Section 125 plan that fits the needs of your employees and gives your business a competitive edge. With years of experience, our team is dedicated to providing excellent service and tailored solutions for your business.

Is a Section 125 plan right for your business? Contact The Capital Group online or call 301-214-7666 today.

What Is a Section 125 Plan?

In a Section 125 plan, employees pay for qualified expenses on a pre-tax basis through salary reductions. Because employees’ contributions are deducted before taxes are withheld, this reduces their taxable income, providing tax savings for both the employer and employee.

Companies of any size are all eligible for Section 125 plans, and any employee who satisfies the eligibility criteria can participate.

What Is Included in a Section 125 Plan?

A Section 125 (cafeteria) plan allows employees to pick from a selection of offerings. Your company will pay a maximum for each employee, and any costs beyond that maximum will be paid by the employee through payroll deductions.

Available health and welfare options on a Section 125 plan can include:

A Section 125 plan may also include:

  • Health Savings Account (HSA): An account for pre-tax contributions in a high deductible health plan (HDHP) that can be used for qualified health expenses (medical, dental, vision).
  • Flexible Spending Account (FSA): An account for pre-tax contributions that can be used for health (medical, dental, vision), dependent care, and parking/transit expenses.

When selecting your Section 125 plan, working with an advisor will help you choose the plan that is most cost-effective and provides the coverage options your employees need.

Contact The Capital Group to Learn More

If you think a Section 125 plan may be right for your business, The Capital Group is here to help. With extensive experience helping businesses secure the right Section 125 plans for their employees, The Capital Group is the team you can trust for employee benefit options in Maryland, DC, and beyond.

To learn more about Section 125 plans or other group benefit options, contact The Capital Group online or call today at 301-214-7666.