Section 125 Plan Administration 

A Section 125 Plan is a program that allows employees to purchase certain eligible benefits on a pre-tax basis. Regularly reviewing your plan to ensure it is compliant with Internal Revenue Code (IRC) regulations will help it remain a valuable part of your employees’ overall benefit package.

Here are the areas of your plan that should be reviewed regularly by you and your legal advisor.

Plan Document

Your Section 125 Plan must be in writing and operate in accordance with its written plan. The document should be reviewed periodically by the employer, and any changes should be made and finalized in writing. In particular, you should verify the following items are correct in the plan document:

• Plan year;

• Insurance benefits, carriers, and descriptions;

• Eligibility of the insurance benefits offered under the plan;

• Eligibility requirements for participation in the plan;

• Flexible Spending Account (FSA) minimum and maximum contributions (if offered);

• andNon-elective (employer) contributions and elective (employee) contributions.

• Plan Design