Modified Section 125 Plan Sample Clauses
The Modified Section 125 Plan clause establishes the terms under which an employer offers a cafeteria plan, allowing employees to choose between different types of benefits, such as pre-tax health insurance premiums or other qualified benefits, in accordance with Section 125 of the Internal Revenue Code. This clause typically outlines eligibility requirements, enrollment procedures, and the specific benefits available under the plan, as well as any modifications from the standard Section 125 provisions, such as additional employer contributions or restrictions on certain elections. Its core function is to provide employees with flexible benefit options while ensuring the plan remains compliant with tax regulations, thereby maximizing tax advantages for both the employer and employees.
Modified Section 125 Plan. The plan allows bargaining unit members to redirect a portion of salary, on a pre-tax basis, to a flexible spending account to provide reimbursement for two specific types of expenses: Dependent Day Care (DDC) and Unreimbursed Medical (URM). In addition bargaining unit members may elect to redirect, on a pre-tax basis, a share of the monthly premium for health insurance.