Video: About Pre-Tax Health Insurance Plans

About Pre-Tax Health Insurance Plans

Pre-tax health insurance plans are always going to be associated with group coverage. Learn about pre-tax health insurance plans with help from a longtime insurance broker in this free video clip.

Video Transcript

My name is Susan Combs and I'm an insurance broker for Combs and Company. Today, we're going to talk about pre-tax health insurance plans. So with pre-tax health insurance plans this is always going to be associated with group coverage. So with group coverage in order to be able to do pre-tax health insurance deductions from your employee's paycheck you must set up a section 125. So this is just the vehicle in which you can do this and it's you know, brings you into tax code. The reason that you want to look at doing this is for the employee. The employee actually gets more take home pay because they are paying with their insurance and premiums through pre-tax versus post tax and then you as the employer are saving money because then on that portion of income for the pre-tax deduction you are not paying FICA which is Social Security and Medicare. So ultimately it will actually change you know what you are paying out in taxes and help with your tax burden as well. So you know that's a little bit of information on that. You can talk to your broker, you can talk to your, you know, say your payroll provider, a lot of times they will set up section 125s for you and usually the cost of setting up the plan, administering the plan, far is you know far less than what you are going to be saving in the long run tax implication-wise. So the best thing to do is like I said talk to one of those professionals and they can help you out.

About Pre-Tax Health Insurance Plans

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