Tax Free Payment of Employee Group Insurance Premiums and HSA Contributions Most companies today permit their employees to pay their group insurance premium contributions before tax. They do so through a Premium Only Plan as permitted by Section 125 of the Internal Revenue Code (125 Plan). In order to permit contributions to be made to a Health Savings Account (HSA) tax free, the Section 125 Plan must be implemented or, if one is already in place, the current plan must be re-stated to include HSA language.

It's easy to start! It's easy to maintain! It's easy to terminate when you no longer need it!

In order to have a valid 125 Plan, the IRS says you must have:

• a written plan; and
• a Summary Plan Description (SPD); and
• an enrollment form signed and dated before an employee's first tax free withholding.

The Benefit of a 125 Plan

• 25% Income Tax Savings for Employees: Employees don't pay Federal, State, Local (in Ohio), or Social Security taxes. **You should check with your Accountant for state and local taxes other than Ohio.
• 8% Payroll Tax Savings for Employers: You, the employer, do not have to match Social Security taxes nor do you pay Worker's Compensation premiums (in Ohio) on employee contributions.

Getting Started is as Easy as 1 2 3 with an initial one time set up fee of $250
 

FlexBank will send you everything you need with full instructions. It’s that easy!