A Cafeteria Plan allows employees to pay for their employer-sponsored insurance premiums. The employer may also implement a Flexible Spending Account into the Cafeteria Plan which allows employees to be reimbursed for expenses like deductibles, coinsurance, co-pays, prescription drugs, vision expenses, dental expenses, and day care services.
Even the most comprehensive insurance policies have out-of-pocket expenses. FSAs can help your employees save on these expenses.
Similar to a Premium Only Plan, a Flexible Spending Account permits pretax payment of insurance premiums and also offers additional benefits to employees:
Employees use payroll withholding of pretax dollars to pay for a out-of-pocket medical expenses.
Employees use payroll withholding of pretax dollars to pay for work-related expenses associated with care of a live-in dependent, such as a child or elderly relative.
Flexible Spending Accounts encompass all the aspects of a POP plan with these additional value-added services:
By implementing an FSA into your Cafeteria plan you can reduce your employees taxable compensation. You are also giving employees a way to pay for out-of- pocket medical expenses and work-related daycare expenses.