RMI 3501 Lecture Notes - Lecture 5: Cafeteria Plan, Human Capital
15 Mar 2018
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Questions 1 8 are possible essay questions. Questions 9 12 are items you should be familiar with from the readings. You are a consultant for a large employee benefits consulting firm. One of your clients has inquired about the installation of a section 125 plan. Sold on the idea" as they are simply asking you for expert advice. Your job is to provide convincing arguments for both this employer and their employees as to the advantages of section 125 plans. [the term section 125 is a broad term . so you need to think about way(s) in which it might be applied]. Employer enjoys a reduction in their payroll tax liability by reducing fica taxes. Often can offset a portion of the premiums with the tax savings. Identify and briefly discuss one argument to present to employees during an open enrollment meeting to convince them to participate in a section 125 plan.
