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SECTION 125 AND DECUTIONS

EthelEthel 194 Posts
in HR & Employment Law Vote Up0Vote Down
Not sure what forum is correct, but here goes anyway.

We have a section 125 plan and all eligible premiums are deducted on a pre-tax basis. Yearly, we send out and have everyone sign a premium conversaion form authorizing us to do this (no specific amounts shown). Do we also need to send out for signature from every participating employee another form authorizing & specifiying each deduction at specific dollar amounts? The premium conversion form is upon advice from an attorney, the other is not and is very, very time consuming .

Help.
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Comments

  • 2 Comments sorted by Votes Date Added
  • marcmarc 3,126 Posts
    PMVote Up0Vote Down
    Our authorization to deduct is very specific with respect to the item and the per paycheck amount. In some cases, we also show the annual limit.
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  • irenesmsaclaimsirenesmsaclaims 241 Posts
    PMVote Up0Vote Down
    With respect to the FSA deductions (medical spending reimbursement), you have to have election forms each year or on open enrollment, and a negative election is not advisable for the medical spending part (going on from year to year). As for the premium conversion (Premium-Only or POP), since the premiums usually change each year, it's a good idea to have the specific premiums on the form as well, but not absolutely required. And, per pay period, as Marc said.

    The plan document for your Section 125 (all- inclusive) plan should state which types of benefits require a positive or negative election. It should state the limits for medical spending and dependent care.
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