* Flexible benefit plans that are regulated by the Internal Revenue Code
Many tech firms make it easier for their employees to bear benefit costs by offering flexible benefit plans that let workers pay for specified expenses with pre-tax dollars.
Many tech firms make it easier for their employees to bear benefit costs by offering flexible benefit plans that let workers pay for specified expenses with pre-tax dollars.
High-tech compensation benchmark firm Culpepper polled 115 U.S. firms in the tech sector last month about flexible benefit plans that are regulated by the Internal Revenue Code. Wages earmarked for expenses under these plans are exempt from federal and social security taxes, as well as state taxes in most states.
What follows are the various plan options, along with the percentage of high-tech employers offering them based on company size. (Small companies have 100 or fewer employees; midsize firms have between 101 and 500 employees; and large firms have more than 500 employees.)
* Adoption assistance expense: Workers who are adopting a child can set aside pre-tax dollars into an account for the reimbursement of adoption costs, depending on income level. Offered by 2% of small firms; none of the midsize employers surveyed; and 13% of the large firms.
* Cafeteria plan: Benefits are generally paid for with pre-tax credits or salary reductions so that employees save both federal and state income taxes, as well as social security and/or Medicare. Offered by 26% of small firms; 34% of midsize firms; and 28% of large firms.
* Dependent adult care expenses: Lets workers use pre-tax dollars to pay for dependent care expenses for an adult unable to care for him or herself, such as an elderly parent. Offered by 24% of small firms; 43% of midsize firms; and 75% of large firms.
* Dependent child care expenses: Employees can use pre-tax dollars to pay for dependent care expenses for a child under the age of 13. Offered by 86% of small firms; 100% of midsize firms; and 100% of large firms.
* Premium conversion/premium only: Workers can contribute to group health and group term life insurance with pre-tax dollars. Offered by 60% of small firms; 48% of midsize firms; and 81% of large firms.
* Transportation benefit plan: Employees use pre-tax dollars to pay for certain transportation and parking expenses. Offered by 2% of small firms; 11% of midsize firms and 17% of large firms.
* Unreimbursed medical expenses: Workers use pre-tax dollars to pay medical bills not covered by their insurance. This might include co-payments, deductibles, prescription drugs and dental costs, for example. Offered by 81% of small firms; 90% of midsize companies and 81% of large firms.
