Every year, businesses lose thousands of dollars to payroll taxes. At the same time, employees miss out on health benefits that could really make a difference. That is where a 125 cafeteria health plan comes in. A Section 125 health care plan gives employers a way to save money while giving employees meaningful, tax-free benefits.
The Lumara Plan was built around one simple idea. Employees deserve better support, and employers deserve smarter margins. This fully managed, compliant solution delivers real savings for businesses and real benefits for employees and their families. It does all of this with no added cost, no changes to current plans, and no impact on take-home pay.
How a 125 Cafeteria Health Plan Works
A 125 cafeteria health plan lets employees pay for certain qualified expenses before taxes. This could be health plans, dependent care, or other health-related expenses.
For employers, this means:
- Lower payroll taxes
- Compliance with federal tax rules
- The ability to offer better benefits without extra costs
For employees, a Section 125 health care plan provides access to valuable benefits at zero cost. The Lumara Plan uses this structure to deliver a fully managed solution, making it simple for employers while giving employees a strong benefits package.
Employer Savings with a Section 125 Health Care Plan
One of the biggest reasons to offer a 125 cafeteria health plan is the savings for employers. With the Lumara Plan, businesses can expect:
- $600 per W2 employee annually
- 5 to 10 percent reduction in healthcare costs
Such savings may be put back into the business or used to upgrade the employee benefits. Since the Lumara Plan is a complete management plan, employers are freed from the trouble of IRS compliance and administrative work. The plan takes care of all the paperwork and makes sure that everything is going smoothly.
(H2)Employee Benefits Under a Section 125 Health Care Plan
The real value of a 125 cafeteria health plan comes from what employees get. The Lumara Plan gives employees and their families access to tax-free benefits that support health, wellness, and financial security:
- Increase net pay by $100 per month
- 24/7 Telemedicine and Virtual Care for immediate medical support
- Spousal and dependent coverage at $0 copay
- Employee Assistance Program (EAP) for counseling, addiction recovery support, and couples counseling
- Mayo Clinic programs for trusted health guidance
- Health Vitals Facial Scan Tool to track wellness markers
- Diet and stress management programs
All benefits are included for family members as well, meaning spouses and dependents get the same support at zero cost.
(H2)Why Family Coverage Matters
Including spouses and dependents is a huge part of why a Section 125 health care plan works so well. The Lumara Plan ensures families are covered at $0 copay.
Family coverage helps businesses:
- Boost employee morale and loyalty
- Reduce turnover and hiring costs
- Show genuine care for employees and their families
Combined with tax savings, this makes the plan a full solution for both employees and the business.
Compliance and Peace of Mind
Tax rules and benefits regulations can be complicated. Section 125 plans have strict IRS requirements, and mistakes can cost money. The Lumara Plan takes care of all compliance, so employers do not have to worry.
The plan handles:
- IRS documentation and reporting
- Employee enrollment and communication
- Ongoing plan management and updates
This makes it easy for businesses to provide great benefits without administrative headaches.
Why the Lumara Plan is a Win-Win
The Lumara Plan is a modern approach to benefits. Using a Section 125 health care plan gives businesses meaningful savings while giving employees and their families tax-free benefits.
Key points:
- Employers save $600 per employee per year and reduce healthcare costs up to 10 percent
- Employees see $100 more per month in net pay and gain access to wellness programs
- Families are fully covered, adding extra value
- The plan is fully managed and compliant, removing administrative stress
This plan is a smart, hands-off way to support employees while protecting your bottom line.
Getting Started with a 125 Cafeteria Health Plan
For businesses looking to get the most out of benefits dollars, a 125 cafeteria health plan like the Lumara Plan is a strong choice. Implementation is easy, benefits are clear, and compliance is fully handled.
With Lumara, companies can:
- Protect margins and reduce payroll tax waste
- Provide real value to employees and their families
- Simplify benefits administration
- Show a modern, employee-first approach to benefits
A Section 125 health care plan lets employers support their teams and save money at the same time.
Conclusion
A 125 cafeteria health plan is more than a tax tool. It is a strategic advantage for businesses that care about their bottom line and their workforce. The Lumara Plan makes it simple. Employers save money, reduce healthcare costs, and employees get tax-free benefits that support health, wellness, and family security.
With a Section 125 health care plan, businesses do not have to choose between saving money and supporting employees. They can do both in a way that is fully compliant, fully managed, and completely practical.
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FAQs
Does a cafeteria plan reduce taxable income?
Indeed, a cafeteria plan gives employees the option to pay for benefits on a pre-tax basis, thus reducing taxable income right away.
What is the advantage of cafeteria-style benefit plans?
It lowers payroll taxes, increases the amount of money that employees can take home, and at the same time, it gives employees valuable tax-free health benefits.
What are the disadvantages of a Section 125 cafeteria plan?
Minimal administrative work is required, and employees must use eligible benefits to gain tax advantages.
What is the exemption for cafeteria allowance?
Some employee benefits, such as health coverage and dependent care, are free from federal income taxes.
