What is the value of a Flexible Benefit/Cafeteria Plan?
A. People working for others or working for companies have few tax shelters available through their employment. Generally, an employee can only save current taxes on 401(k) contributions and contributions to their employer sponsored Flexible Benefit/Cafeteria Plan. The Flex Plan permits pretax contributions for such important benefit contributions as medical, dental insurance premiums, and disability insurance premiums. Additionally Flex Plan participants may contribute funds on a pretax basis to cover certain expenses for medical, dental, vision, and hearing costs not paid by insurance plus costs of providing dependent care for dependent children or disabled adults. Tax savings for most people will be between 30% and 40% of the costs of the expenses handled through their Flex Plan accounts. Q.
