Reviewing Your Employee Benefits? Consider a Cafeteria Plan
A Cafeteria Plan also known as a Flexible Benefit Plan is a written plan that allows participating employees to choose from a "menu" of taxable and nontaxable benefits that suit their individual needs. Benefits that may be offered in a Cafeteria Plan/Flexible Benefit Plan include, but are not limited to Vacation Days, Life Insurance, Dependent Care Spending Accounts, Health Insurance, Dental Insurance, and Disability Insurance. The employer is not required to pay 100% of the premium for all the plans selected. Most often, the employer establishes a predetermined amount of benefit dollars per employee for the plan year. The employee is able to choose from a variety of benefit options and is responsible for any premium payments that go beyond the employers contribution. An employer who establishes this type of plan realizes reductions in FICA (Federal Insurance Contributions Act) and FUTA (Federal Unemployment Tax Act) taxes and the expansion of employee benefits and enhanced employee appreciation of the benefit package. Benefits for the employee are the opportunity to select benefits most suited to their individual needs; to pay for benefits with before -tax dollars rather than with after- tax dollars; to obtain benefits which may not be available for individual purchase; and to pay less FICA taxes by reducing their taxable income.

Recruiting highly skilled and qualified new employees has become quite a challenge for many employers. It has proven equally difficult for companies to keep experienced, talented, knowledgeable, well trained employees on their payroll. Many employers have discovered that offering an attractive flexible benefits package plays an important part in attracting new hires as well as holding on to their experienced employees.

For more information about Cafeteria Plans/Flexible Benefits Plans, contact the company who provides your company with health insurance or retirement benefits. They should be willing to provide you with assistance.

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