Cafeteria Plan Administration

The ABC Insurance Trust now offers Cafeteria Plan Administration services, or Flexible Compensation Plans through Total Administrative Services Corporation (TASC) at a special 20% first-year discount for ABC Members!

FlexSystem, an IRS Code Section 125 Cafeteria Plan, enables employers to offer employee benefits on a pretax basis. With FlexSystem, employers use these services to handle administration and operation of the plan.

FlexSystem saves both employer and employee money! The employer saves payroll tax, and because their eligible expenses are purchased with pre-tax money, employees save on their State, Federal and FICA taxes. The most common expenses include medical or health-related insurance premiums, eligible medical expenses, and dependent care expenses.

Participating businesses typically save an average of $300 per employee per year in payroll taxes.

You can create a more comprehensive benefits package by using a flexible spending account program. You will reduce payroll costs and enhance your ability to recruit and retain quality employees.

1. It saves the employer thousands of dollars in payroll taxes. This is possible through employee salary reductions. When the employee's salary is reduced, the company reduces payroll expenses for FICA, and in some cases may also reduce Unemployment Tax and Workers' Compensation premiums. For a company with 50 employees, a Flexible Compensation Plan could mean $2,000 - $10,000 a year in reduced payroll taxes and expenses!


2. It increases employee's benefits and take home pay. Employees who are participants in the Flexible Compensation Plan are reimbursed for eligible expenses with tax free dollars. The tax savings provide increased benefits and increased take home pay.


3. There is no increase in employer contributions for employee benefits. Added benefits under the Flexible Compensation plan are paid for by redirecting employee tax dollars, not by increasing employer contribution.

For more information, call us at 1-800-621-2993.