The Section 125 Plan
The Section 125 Plan provides tax savings by reducing employee medical premiums
from your gross salary prior to calculation of federal income and social
security taxes, as allowed under Internal Revenue Code (IRC) Section 125.
Medical premiums will automatically be taken as pre - tax, unless a Section 125
Waiver form is submitted to the Benefits & Work/Life Office. Contact the
Benefits & Work/Life Office to request a form.
Newly eligible employees may elect to waive Section 125 at the time they choose
a medical plan. Otherwise it can only be changed during the open enrollment,
for a January 1 effective date.
The Section 125 Plan reduction does not reduce the salary on which an
employees maximum deferral limit for the Voluntary Investment Program is
calculated. The reduction does, however, lower the salary on which both Social
Security and Unemployment Benefits are calculated. If an individual is close to
beginning a Social Security benefit they may wish to consider waiving the
Section 125 Plan for their medical premiums.
Learn about:
The Health Reimbursement Account (HRA)
The Health Savings Account (HSA)
The Flexible Spending Account (FSA)
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