Core Documents

Employers offering group health insurance must comply with federal ERISA and Affordable Care Act (ACA) requirements—or face steep fines. A critical component of compliance is the  Wrap SPD plan document , which ensures plan participants receive clear, legally complete disclosures. This article explains what a Wrap SPD is, why it matters, and how it protects employers and employees alike. What Is a Wrap SPD Plan Document? A  Wrap SPD  (Summary Plan Description) is a supplemental document created by an employer to meet ERISA’s disclosure requirements. Because insurance carriers’ benefit booklets or Certificates of Coverage often omit core ERISA provisions, the employer drafts a wrap document that “wraps around” those materials, combining them into a legally compliant SPD and plan document . In legal terms, the Wrap SPD and the carrier’s certificate together constitute the official plan document and SPD that employers are required to deliver to participants . Why Employers N...

  A well-structured   Section 125 plan design   can be a game-changer for both employers and employees. Also known as a Cafeteria Plan   or   Premium Only Plan (POP), a Section 125 plan allows employees to pay for certain benefits—such as health insurance premiums, dental, vision, or dependent care—using   pre-tax dollars. This simple adjustment in payroll structure can result in significant tax savings across the board. What Is a Section 125 Plan? Under IRS regulations, a Section 125 plan enables employees to convert a portion of their taxable income into non-taxable benefits. The most common form is the Premium Only Plan, which allows workers to pay insurance premiums before taxes are withheld. This not only reduces an employee’s taxable income but also lowers the employer’s payroll tax liability. For example, when an employee enrolls in a company-sponsored health insurance plan, their premiums are deducted from gross wages before taxes are calculate...

  Health Reimbursement Arrangements (HRAs) are becoming an increasingly attractive option for small businesses seeking to offer flexible, cost-effective health benefits. With rising healthcare costs and growing demand for personalized benefits, an   offers a win-win: tax advantages for employers and customizable options for employees. Unlike traditional group health plans, HRAs allow business owners to reimburse employees tax-free for qualified medical expenses and premiums, often without the complexity or cost of managing insurance policies directly. What is an HRA? An HRA is an employer-funded health benefit account that reimburses employees for medical expenses. Employers determine the allowance amount, and employees use the funds for eligible expenses, such as health insurance premiums, copays, prescriptions, and more. HRAs are 100% tax-deductible for employers and tax-free for employees, provided they meet IRS guidelines. These plans offer small businesses a flexible way ...

  When it comes to providing employee health benefits while maximizing tax efficiency,   Section 105 HRA   plans stand out as a powerful option. A   Section 105 Health Reimbursement Arrangement (HRA)   allows employers to reimburse employees for qualified medical expenses and health insurance premiums on a tax-free basis. For businesses seeking flexibility and cost control in employee benefit design, a Section 105 HRA offers a strategic solution that can fit companies of all sizes. What Is a Section 105 HRA? A Section 105 HRA is an employer-funded health benefit plan governed by Section 105 of the Internal Revenue Code. It enables employers to reimburse employees for eligible out-of-pocket healthcare costs and insurance premiums without the reimbursements being subject to income or payroll tax. This arrangement is especially beneficial for small businesses and self-employed individuals looking to offer competitive health benefits without the high costs of tradit...

  In recent years,   IRS Section 127 changes 2025  has played a significant role in helping employers support the educational and financial well-being of their employees. Under this provision of the Internal Revenue Code, employers can provide up to   $5,250 annually in tax-free educational assistance   to each employee. Traditionally, this benefit was limited to covering tuition, books, and similar education-related expenses. However, with the introduction of the CARES Act in 2020, a major enhancement was made, allowing employers also to use this amount for  student loan repayment assistance . This expansion, which was set to help both employers and employees during the COVID-19 pandemic, is now facing a critical turning point. Unless extended through new legislation,  IRS Section 127’s student loan repayment benefit will expire on December 31, 2025 . What’s Changing in 2025? The  temporary expansion  of Section 127 that includes  ...

  In today’s fast-paced world, balancing work and family responsibilities can be challenging—especially for working parents. One valuable solution many   employee Benefits Dependent Care FSA . This benefit provides a strategic way to reduce the financial burden of childcare or elder care, while also helping employees save on taxes. Under  IRC Section 129 , employers can offer a  Dependent Care Assistance Plan (DCAP) —commonly known as a Dependent Care FSA—as a part of their employee benefits package. This program allows employees to set aside pre-tax dollars to pay for eligible dependent care expenses. It not only supports employees' work-life balance but also helps employers enhance their benefits offerings without increasing salary costs. What is a Dependent Care FSA? A  Dependent Care FSA  is a type of account where employees can contribute up to $5,000 per household annually ($2,500 if married filing separately) from their paycheck before taxe...