Section 125 Plans Explained
Section 125 of the Internal Revenue Code was enacted in 1969. Section 125 Plans (Cafeteria Plans) refer to a type of insurance plan that meets the specific requirements of Section 125 of the Internal Revenue Code.
A Section 125 Plan allows employees to select among a variety of nontaxable benefits (e.g. Elysian) and cash (e.g. salary).
With a Section 125 Plan from Elysian Dealer, the premium payments are deducted from your wages before your employer calculates your social security and Medicare taxes and your federal withholding.
To see how a Section 125 Plan could create potential tax savings to you, take a look at the video below.
What are pre-tax premiums?
These are payments deducted from your wages before your employer calculates your social security & Medicare taxes & federal withholding.
So, the Elysian Dealer payments associated with a Section 125 Plan reduce your gross income, which may create potential tax savings.
What are gross wages?
Gross wages are defined as the amount an employee ears before taxes and other deductions.
For a salaried employee, gross wages are his/her annual salary. For an hourly employee, gross wages are the hourly wages multiplied by the number of hours worked.
Is my health plan affected?
No. The Elysian Dealer plan does not affect your current major medical health plan coverage.
Our supplemental plan is separate and apart from your current medical coverage and any other coverage you may have individually or through your employer.
BMD Indemnity Plan Tax Advice
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All plan participants have free access to tax advisory services provided by Brennan Manna & Diamond, LLC, and their online platform (BMD Gateway).
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