Cafeteria Program

This program permits employees to create their own palette of benefits based on their individual needs.

There are two approaches:

• A modular plan provides a choice between predetermined benefit packages.
• A core approach utilizes a base level of coverage for all employees and permits them to add options.

Flexible Spending Accounts (IRC Section 125)

Employees are paying a greater portion of their health care expenses today. With a flexible spending account, employees can pay for medical expenses not covered by insurance with pre-tax dollars. This can include their own health insurance premiums and dependent care expenses.

Dependent Care

This program provides tax relief for employees who incur child or adult daycare expenses. This plan allows for employee reimbursement up to $5,000 annually, on a pre-tax basis, for qualifying daycare expenses.

Premium Conversion

If your program was created for employees to pay for their own coverage (or a portion of it), this plan permits them to make their payments on a pre-tax basis. These payments are considered salary redirections or reductions and, hence, they owe no tax on the premium amounts nor will you have to pay FICA on what would have been considered earnings.

Health Reimbursement Arrangements (HRA)

This is a distinct defined contribution health care plan. HRAs, sponsored by the employer, mix the best facets of both flexible spending accounts and medical reimbursement accounts. They also help you reduce health plan costs by combining the HRA with a high-deductible base plan. Employees can carry over unused dollars with HRAs, which earn interest and can be ultimately available for medical expenses at retirement. HRAs reward careful shoppers. These plans are available through second submission, debit card system, and may be available through seamless administration. This plan also permits year-to-year accumulation without the use-it-or-lose-it limitations.

Health Savings Account (HSA)

If the previous plans do not exactly match your needs, you can also obtain an HSA through our sister firm, Associated Mutual Hospital Services of Michigan (AMHI). We can both help you develop and design a plan as well as take responsibility as a trustee. This tax-free account is available to anyone under age 65 and permits year-to-year accumulation without the use-it-or-lose-it limitations.