Section 125 Administrators and Why You Should Outsource
Employers may choose to administer a pre-tax Section 125 in-house or outsource with a qualified Section 125 Cafeteria Plan Administrator. This pre-tax section 125 plan will allow the employer to save FICA taxes and save employees 17% to 40% in taxes on premiums and unreimbursed medical, dental, vision, and daycare expenses.
Outsourcing with a Section 125 Plan Administrator vs. Administering In-house
You can make an argument for either outsourcing Cafeteria Plan Administration or administering internally. I wanted to take a moment to discuss this very debate and shed light on why an employer should outsource with a qualified Section 125 Administrator.
Outsourcing has been a valuable strategic management tool for decades. But in today’s highly competitive and ever widening global marketplace, more emphasis is being placed on the advantages that outsourcing can give an organization.
The driving force behind the decision to outsource is the ability to allow your organization to focus on what you do best: core competencies, delivering a quality product or service. Outsourcing allows you to redirect focus to your revenue driven processes and not on back-office cost center functions. Outsourcing will allow your organization to be more efficient, more effective, and reduce overall costs.
Outsourcing opens up the doors for your organization to gain access to top-level professionals in your non-core areas, state of the art technology, industry defined best practices, and stay up to date on compliance and legal updates.
Partnering with a qualified Section 125 Administrator such as BusinessPlans, Inc. will allow your employees to access their individual account information 24-hours a day, seven days a week from anywhere in the world. As an employer, you also gain 24-hour Internet access. You may query reports and check the status of your plan around the clock when you want and need information.
In essence, offering self-service to your employees gives them the feeling of control while at the same time reducing the company’s cost for personnel wages, technology, and supplies and boosting employee morale. This is a win-win situation for you and your employees.
