Section 125 Plans
Section 125 is often called the “last great tax break.” It’s all about keeping more of your money, and increasing your employees’ take-home pay.
Benefit Administrative Services International Corporation (BASIC), a company based out of Portage, Mich., provides Section 125, also known as Flexible Spending Account (FSA), program management for MDA members and their staffs with discounts on set-up and administration fees.
Choose the BASIC plan that coordinates with your practice needs.
BASIC LITE – a Premium only plan.
Premiums for employer-sponsored health plans are deducted pre-tax. This produces savings for both the employee and the employer.
BASIC FLEX – a Cafeteria Plan.
An FSA established as part of Section 125 of the Internal Revenue Code. It allows you, the employer, to pay for certain benefits before taxes, which saves you money and increases your employees’ take home pay. Improve your benefits package by offering BASIC FLEX. It’s affordable, and it’s easy:
- funded by employee payroll deductions;
- employer (you!) saves FICA match on every dollar of pre-tax deductions;
- helps control health care costs. These dollars are set aside in a special account and used to pay for known expenses as they occur;
- you save paying federal and most state and local taxes as well as Social Security taxes on the amount the employee sets aside.
BASIC FLEX offers three options for employees:
OPTION 1 – Premium Contribution
The employee is allowed to deduct pre-tax their share of many employer-sponsored health plan costs:
- health Insurance plans, including dental, vision, and prescription drugs;
- eligible group term-life insurance, accidental death and dismemberment insurance, and group short-term and long-term disability; and
- other eligible accident or health benefits.
OPTION 2 – Medical Reimbursement
Pre-tax dollars are deducted and deposited into a medical reimbursement account. The employee can then be reimbursed for eligible out-of-pocket expenses, including:
- deductibles and co-pays;
- lab fees and prescriptions;
- Well Baby checkups;
- dental, vision, and hearing expenses;
- diabetic supplies;
- and more!
OPTION 3 – Dependent Care Reimbursement
Pre-tax dollars are deducted and deposited into a dependent care account. The employee can then be reimbursed for eligible child care expenses.
MDA members who take advantage of what BASIC has to offer can choose to self-administer the plan or to use BASIC as a third-party administrator.
As an MDA member you receive a discount through BASIC on the fees associated with setting up and administering Section 125 plans.
The MDA receives royalties when members use the product or services described above.