Offering a strong employee benefits package is a smart move for any business, but it must follow IRS rules to avoid penalties or disqualification. One key area to focus on is your Section 125 cafeteria plan benefits. These plans help employees save on taxes, but only if your documents are set up and managed the right way. 

In this blog, we’ll explain what IRS compliance really means in simple terms. We’ll also show how Elevate+ makes it easy by combining Section 125 with a fully managed PCMP and SIMRP, creating one of the most compliant and valuable benefit programs available.

What Is a Section 125 Plan?

A Section 125 plan, also called a cafeteria plan, helps employees save money by using pre tax dollars to pay for certain benefits like health care and wellness programs. This means they take home more money in each paycheck. Employers also save money because they pay less in payroll taxes. But there is one very important thing to remember. The plan must follow all IRS rules. If your documents are old, missing information, or not set up the right way, the IRS can reject the plan. This can lead to extra taxes and problems. That is why proper documents really matter.

What Makes a Plan IRS-Compliant?

To make sure your Section 125 plan stays safe and approved by the IRS, your documents need to be done the right way. It’s not just about offering good benefits, it’s also about showing everything clearly on paper. Here’s what your plan documents should include:

• They should clearly explain all the benefits your employees can get through the plan.
• They must include all the legal terms the IRS requires to make the plan valid.
• The documents should be signed and dated properly by the right people.
• They need to be checked and updated regularly so nothing is missing or outdated.
• The plan must follow IRS nondiscrimination rules, which means it should treat all employees fairly and not give better benefits only to higher paid employees.

Why Traditional Section 125 Plans Fall Short?

Most traditional Section 125 plans only offer basic benefits. They often don’t include extra tools or support for keeping the plan updated and compliant. That’s where problems start.

Elevate+ is different. It leverages Section 125 together with a fully managed Preventative Care Management Plan (PCMP) and a Self Insured Medical Reimbursement Plan (SIMRP). This makes it one of the most compliant and benefit-rich programs available.

How Elevate+ Helps Ensure IRS Compliance?

Elevate+ takes the stress out of staying IRS-compliant. Everything is handled for you in a simple and professional way, so you don’t have to worry about making mistakes. Here’s how Elevate+ keeps your plan on track:

• Professionally Managed Documents: You don’t need to create or manage documents yourself. Elevate+ gives you ready-to-use documents that follow all current IRS rules.
• Always Updated: IRS rules can change over time. Elevate+ keeps your documents updated automatically so you are always in line with the latest requirements.
• Fairness Testing Built In: Elevate+ runs regular checks to make sure your plan treats all employees fairly and doesn’t just help high earners. This is something many plans miss, but Elevate+ handles it for you.
• Fast and Easy Rollout: You can start the plan in just 30 to 45 days. The process is simple, and you’ll have full support every step of the way.

Benefits for Employers

With Elevate+, employers get more than just a benefits plan. They get a smart, fully managed program that saves money and supports their team, without adding extra work or costs. Here’s what employers can expect:

• Employers save around 600 dollars per W2 employee every year. For a company with 100 employees, that’s about 60,000 dollars in savings.
• There is no out of pocket cost to set up or run the program.
• Health claims go down, which reduce up to 5-10% healthcare costs.
• Employees stay longer and perform better, which helps build a stronger team.
• The plan creates an immediate impact on your company’s bottom line.

Benefits for Employees

With Elevate+, employees get more out of their benefits without paying more. It helps them save money, stay healthy, and feel more supported, all at no extra cost to them. Here’s what employees receive:

• They get a $100 per month increase in their take-home pay.
• They pay zero dollars for healthcare services 
• They get access to enhanced round-the-clock virtual care, mental health, and wellness services.
• They get access to Mayo Clinic tools and a personal health dashboard to manage their health easily.
• They are protected with additional recovery support, couples counseling, and a diet and stress program 
• Their spouses and dependents are also covered under the plan.

Final Thoughts: Ensure Compliance With Section 125 Plan

If you want to make sure your Section 125 cafeteria plan benefits are IRS-compliant, Elevate+ is your best option. It combines powerful tools, expert support, and complete compliance, all with no out-of-pocket cost.

Instead of managing everything yourself, let Elevate+ do the heavy lifting. Your business saves money. Your employees get better benefits. And your plan stays fully compliant.

Want to Ensure Compliance with The Plan?

Want to save money and give better benefits to your team? Book a quick 10-minute call or ask for a free proposal. Visit Elevate-Benefits.com and see how Elevate+ can help your business stay compliant and grow stronger.