Pre-Tax Premium Payment
Employees pay for their portion of selected benefits using pre-tax dollars. That means a savings of up to 40%, depending on the state and tax bracket of the employee. The savings result from employees using pre-tax dollars to purchase services and supplies they would have purchased anyway with after tax dollars. Since employees actually reduce their taxable income by using the pre-tax payment option, the employer also saves nearly 8% FICA tax on every dollar set aside into the program. Here are some of the benefits that may be included in a Pre-Tax Premium Plan:
- Health
- Prescription
- Dental
- Vision
- Employee Group Term Life (up to $ 50,000.00)
- Cancer
- Medicare Supplement
- Hospital Indemnity