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Flex Plan Web Page Chris, please insert this paragraph at the beginning of the text. What is a 125 Flex Plan A Flex Plan is an employer-sponsored benefit that allows employees to be reimbursed for certain expenses tax-free. Employees save federal, state, social security and Medicare taxes on those dollar amounts, thus increasing their take-home pay. Flex Plans are part of the Internal Revenue Code, section 125, and are designed to give employees the opportunity to pay for certain eligible living expenses with tax-free dollars. Before a Plan Year begins employees elect to have a certain amount of their salary designated as tax-free. These tax-free election amounts are to be used for eligible expenses in the Flex Plan. Employers also benefit by providing a Flex Plan because they do not have to pay FICA (7.65%) on employees’ Flex election amounts.
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