Why More Employers Are Switching to a Sec. 125 Plan?
Employee benefits are one of those things everyone agrees are important, but almost nobody enjoys dealing with. Employers feel boxed in by rising costs. Employees feel lost in fine print. HR teams feel stuck in the middle, explaining the same thing over and over again. This is where a sec. 125 plan quietly does its job. No hype. No fancy buzzwords. Just a smarter way to handle benefits that already exist. If you’ve heard the term tossed around but never really stopped to understand it, you’re not alone. Let’s slow it down and talk like real people. What a Sec. 125 Plan Really Is? At its core, a sec. 125 plan is about one simple thing: taxes. More specifically, saving them. A Section 125 plan allows employees to pay for certain benefits with pre-tax dollars instead of post-tax income. That means less taxable income for employees and lower payroll taxes for employers. Both sides win. Not in a flashy way, but in a practical, numbers-on-paper way. These plans are often called cafeteria pl...