There are four main options available through a Section 125 Plan.
Premium Only Plan – A premium only plan permits an employee to have qualified insurance premiums deducted from his paycheck without federal, state, local, Medicare or Social Security taxes.
Flexible Spending Account – A flexible spending account allows an employee to have money deducted from his paycheck on a pre-tax basis to help cover out of pocket medical, dental, vision and prescription expenses for himself and his family members throughout the Plan Year.
Dependent Care Spending Account – A dependent care spending account allows an employee to deduct child care expenses from his paycheck on a pre-tax basis.
Transportation Benefits – This feature permits an employee to deduct parking fees, transit passes and certain other transportation expenses from his paycheck on a pre-tax basis.