Section 125 Plan (Premium Only Sample Clauses
A Section 125 Plan (Premium Only) clause establishes an arrangement that allows employees to pay their share of employer-sponsored health insurance premiums with pre-tax dollars. Under this clause, employees' premium contributions are deducted from their gross pay before taxes are calculated, reducing their taxable income and resulting in tax savings. This mechanism applies specifically to premium payments for eligible benefits, such as medical, dental, or vision insurance. The core practical function of this clause is to provide a tax-advantaged way for employees to pay for health coverage, thereby increasing their take-home pay and making benefits more affordable.
Section 125 Plan (Premium Only. The Board shall adopt and implement a "cafeteria plan" which is designed to provide that employees who are members of the bargaining unit and participants in the payroll deducted benefit plan of the Board will pay any employee contributions required under such plan on a pre-tax basis, as permitted under Internal Revenue Code Section 125 and all Treasury Regulations and rulings therein ("Code Section 125"). Employees shall elect to participate in the cafeteria plan in accordance with its terms; and an employee shall be permitted to change his election to participate in the cafeteria plan to the extent provided in such plan and to the extent it is not inconsistent with the terms of the payroll deducted benefit plan of the Board. The Board shall be entitled to amend the cafeteria plan at any time to comply with the requirements of Code Section 125 or in any other manner upon notification to the Association.