2012 ★ direct line adverts cast 2012. ★ massachusetts connector 2012 premiums. 2011 Prices where is the cheapest realestate in canada 2012, does my home insurance claim from my neighbours for a awter laek.

Aiming to provide affordable health insurance to its residents, leaders of the state of Massachusetts took the first proactive step towards health care. That first step led to the creation of the Massachusetts Health Connector.

How Can I Participate? In Massachusetts, if you have 11 or more eligible employees working for your small business, you must establish a Section 125 plan and offer availability to the Connector on a pre-tax basis. But don’t worry – this isn’t yet another government mandate expecting you to pay still more fees.

The most simple of these cafeteria plans, as Section 125 plans are also referred to, is the Section 125 POP. POP is an acronym for Premium Only Plan, and that means that your employees are allowed the ability to pay for their benefits on a pre-tax basis. And, even better, you get a benefit from their tax savings.

Why Is This Good for Employees? A Section 125 POP plan, once established by your business, allows your employees to choose the benefits that they want. It’s great for employees because they choose – and pay for – only those benefits they want and those that fit their personal needs and budget. The employee chooses from a menu of options, and the premiums he pays are deducted from their pay on a pre-tax basis. Simply put, the amount that goes to premium payment lowers the taxable income. This translates to a decrease in FICA and Medicare taxes, and even federal and state income taxes.

The employee can choose from a range of health plans offered through the Connector, including Fallon Community Health Plan, CeltiCare, Health New England, Blue Cross Blue Shield of Massachusetts, and Tufts Health Plan, among others.

How Would This Benefit the Employer? The benefit for you, the employer, is that you also have lower FICA and Medicare payroll taxes, because the employees share of these costs are lower. The lower taxable income also translates to smaller FUTA taxes, and possibly to lower state and local taxes.

So, even though you’ve offered a benefit to your employees that will help them with their needs, it has the bonus of employer cost savings. Prior to the Connector unless the employer sponsored a health plan it was not possible for employees to purchase benefits through a Section 125 POP plan.

But Are There Compliance Requirements? All these talk about tax savings is music to the ears, but you might ask – How about compliance? While it’s true that IRS Section 125 POP plans are governed by IRS rules, and there are significant steps you must follow to make sure your plan is compliant and retains its tax-preferred status, it isn’t hard to stay on top of the newest rules. The federal government has created a website where you can find a template for compliance you can easily replicate. Another alternative is for you to consult with a professional plan administration service.

If you want to find out just how easy it is to keep in compliance with IRS policies for Section 125 plans, give us a visit at http://taxfreepremiums.com. You’ll also get to know what other Section 125 benefits there could be and how you can make full use of these.

Tagged with: • • • • • • • •

Like this post? Subscribe to my RSS feed and get loads more!