Medicare Supplement

If you are getting close to your 65th birthday, you are likely preparing to enroll in Medicare. Enrolling in Medicare and figuring out how to decrease your out-of-pocket health care expenses can be daunting. A Medicare supplement plan can save you money and provide peace of mind.

Original Medicare, which consists of Medicare Part A and Part B, typically does not cover all of an individual’s health care costs. In order to fill the gap, many individuals purchase a Medicare supplement plan. Medicare supplement plans, also known as Medigap policies, are policies that can be purchased to cover expenses that Medicare does not pay.

The most common supplemental plans provide coverage for your out-of-pocket expenses not paid by Medicare, such as copays, deductibles, coinsurance, as well as some services that may not be covered by Medicare, such as international travel emergencies. Plans vary, so look for a plan that provides the coverage you need.

Cafeteria Plan

Many employers struggle with the challenge of providing an attractive compensation package at an affordable price. One tool available to meet this challenge is the Section 125 plan. Section 125 plans are also commonly referred to as cafeteria plans. While there are different types of Section 125 plans, each provides the opportunity to save money by reducing both the employer’s and employees’ tax liability.

A Section 125 plan may be established pursuant to rules found in the Internal Revenue Code Section 125. This IRC provision provides an exception to what is generally called the “constructive receipt doctrine.” Under the constructive receipt doctrine, offering an employee a choice between cash and an employee benefit requires that the amount that could have been received be included in the employee’s gross income.

A Section 125 plan allows employers to provide their employees with a choice between cash and certain qualified benefits without adverse tax consequences. Without a Section 125 plan, employee contributions can only be made with after-tax dollars.

What are the different forms of Section 125 plans?

The three basic forms of Section 125 plans are:

  • Premium Only Plan;
  • Flexible Spending Account; and
  • Full Cafeteria Plan.

Voluntary / Supplemental Products

Voluntary benefits are coverages and products made available to employees for elective purchase. These programs have four key characteristics:

100 percent employee-paid

  • Offered through an employer
  • Solicited and enrolled through a carrier or enrollment firm
  • Paid through automatic payroll deductions

Because of their cost efficiency and portability, as well as their contribution to an employee’s work–life balance, voluntary benefits are becoming a central component of many companies’ overall benefits strategies.

What are some common voluntary benefits?

  • Life insurance
  • Disability income insurance
  • Dental/vision insurance
  • Prepaid legal services
  • Identity theft insurance
  • Accident
  • Cancer
  • Critical Illness